Preamble

The House met at Half past Two o'Clock

PRAYERS

[Mr. SPEAKER in the Chair]

HIGH COURT SUBPOENA (APOLOGY)

Mr. Speaker: I have to inform the House that I have received this morning a letter from Messrs. Fink, Proudfoot & Waters, solicitors, of Southampton House, High Holborn, London, W.C.1, and dated 2nd December, 1953. It reads as follows:

"Dear Mr. Speaker,

I wish to tender my apologies to you and to the House for having permitted the Rt. Hon. Harold Wilson to be served with a subpoena to attend the High Court on the 30th November, 1953.

I would like you to know that, unfortunately, advice which my firm had received had been misread and so this unfortunate error occurred. Please believe it was not intended to violate the Privileges of the House of Commons or of any Member of the House.

I have today written a letter to the Rt. Hon. Harold Wilson in terms similar to this letter.

I beg you and the House to accept my sincere apologies.

Yours faithfully,

Romy Fink."

In view of this letter and the explanation and apologies which it contains, I think the House would like me to write saying that we accept the apology and regard the incident as closed.

The Lord Privy Seal (Mr. Harry Crookshank): I am sure that that would be the wish of hon. Members in all parts of the House.

Oral Answers to Questions — IMPORTED DOGS (QUARANTINE)

Sir I. Fraser: asked the Minister of Agriculture if he will consider relaxing the quarantine Regulations applicable to imported dogs if evidence can be produced that they have been effectively inoculated.

The Minister of Agriculture and Fisheries (Sir Thomas Dugdale): No, Sir. Inoculation cannot be relied on to give complete protection against the spread of rabies.

Sir I. Fraser: Will my right hon. Friend watch this matter, because it would obviously save a good deal of money and trouble if we could find a means to deal with this troublesome quarantine position?

Sir T. Dugdale: Yes, Sir, I will, but after the experience of 30 years it is proved that this country is far in advance of any other country in this respect.

Oral Answers to Questions — LIVESTOCK (TRANSPORT)

Mr. E. Johnson: asked the Minister of Agriculture whether he will consider appointing a committee to investigate conditions governing the transport of horses and other livestock by road, rail and sea.

Sir T. Dugdale: The transport of animals is regulated by comprehensive orders, and that relating to horses was amended in 1951 to give effect to the recommendations of the Rosebery Committee. I am not aware that these orders are unsatisfactory, or that there is any need for any further investigation, but I am prepared to look into any points that my hon. Friend may bring to my notice.

Mr. G. Williams: Do these orders apply to road and to sea? I gather that the rail ones are satisfactory, but I am not sure whether there are any orders for road and sea.

Sir T. Dugdale: I think that is the case, but at present the orders do not apply to the air.

Mr. Hastings: Is the right hon. Gentleman aware that there is great cruelty to horses in transporting them by sea, and that in many cases horses brought over from Ireland have to be killed on arrival because they are injured so severely and are suffering so much?

Sir T. Dugdale: Yes, Sir. There were two recent orders on this matter. That which was introduced in 1951 incorporated the recommendations on the transit of horses made by the Rosebery Committee. Since those orders have been in force, the position has been much improved, but I will, of course, continue to watch it.

Oral Answers to Questions — AGRICULTURE

1947 Act (Notices to Quit)

Mr. Peart: asked the Minister of Agriculture if he will take steps, in the legislation to be introduced to amend the Agriculture Act, 1947, to prevent a landowner giving notice to quit each year when the application has been rejected on more than one occasion by the agricultural land tribunal.

Sir T. Dugdale: I fear that the particular amendment to the present law proposed by the hon. Member would operate too rigidly in practice, but I have a different amendment under consideration which I think would meet his point. This would empower an agricultural land tribunal, when it saw special reasons for doing so, to require the payment of costs by a person concerned in a reference to it.

Mr. Peart: While thanking the Minister for that reply, which will be given very careful attention, may I ask him always to bear in mind that there is hardship to a farmer who has repeatedly to be faced with what are often very heavy legal costs? If an application for dispossession is brought each year, the farmer's morale may be destroyed. I hope the Minister will bear that in mind when he brings forward his proposals.

Commander Donaldson: Will the amendment which the Minister has in mind apply to Scotland as well as to England and Wales?

Sir T. Dugdale: I must have notice of that question.

Farmers and Smallholders (Dispossession)

Sir W. Smithers: asked the Minister of Agriculture when details of his proposal to give land tribunals the power or duty to state a case to the High Courtwill be available, and, pending the introduction of this legislation, whether he will ensure that no farmer or smallholder shall be dispossessed.

Sir T. Dugdale: My proposal involves legislation and details will be available when the necessary legislation is introduced. I cannot adopt the proposal in the second part of the Question.

Sir W. Smithers: Is the Minister aware that his proposals are a step, but only a step, in the right direction and that we should continue to press for the right of all Her Majesty's subjects to appeal against dictatorial decisions in a court of law?

Mr. Bowen: Will the Minister also look into the whole question of the powers of the agricultural land tribunal with regard to the award of costs?

Sir W. Smithers: asked the Minister of Agriculture what compensation Her Majesty's Government will offer those farmers and smallholders, who, having been dispossessed of their farms by his Department, have lost their only source of livelihood, and have no right of appeal to a traditional court of English law on points of fact or of merit.

Sir T. Dugdale: An owner who is dispossessed for bad estate management receives the value of his land while an owner/occupier who is dispossessed on grounds of bad husbandry retains the ownership of his land and gets a rent from his future tenant. I have no power in either of these cases or with an ordinary tenant farmer to offer in addition compensation for loss of livelihood upon dispossession from their land.

Sir W. Smithers: How long does the Minister, as a Member of a Conservative Government, intend to persist in being a party to methods which are in operation behind the Iron Curtain, and which have there proved a failure? Will he either give way on this or resign?

Sir T. Dugdale: I shall adopt neither of those suggestions, but I would point


out to my hon. Friend that if compensation were given to such persons it would put a premium on bad management and bad husbandry.

Common Land, Wales

Mr. Garner Evans: asked the Minister of Agriculture how many acres of land in Wales are classed as common land; whether he is satisfied that the best use is being made of these lands for stock rearing and forestry; and what steps are being taken to bring these lands into full production.

Sir T. Dugdale: The exact acreage of common land in Wales is not known, but has been estimated at about half a million acres. More productive use of some of this land would no doubt be technically possible, but as the law now stands I have no power to initiate steps to this end.

Mr. Evans: Will the right hon. Gentleman take steps to find out how many acres of common land there are in Wales?

Sir T. Dugdale: It is very difficult to give an exact figure, but there are about half a million acres.

Mr. T. Williams: Does the right hon. Gentleman not think it much more important to ascertain what use is being made of that common land rather than its actual acreage?

Mr. Baldwin: Will my right hon. Friend consider bringing in a law to deal with waste land on commons not only in Wales, but all over the country, and which is of use neither to the common holder nor to the nation as a whole?

Sir T. Dugdale: As I think the House is aware, the existing law relating to commons is full of complexities. It goes back many hundreds of years, and any legislation dealing with the matter would be extremely complicated and detailed.

Mr. P. Morris: Does not that very fact emphasise the need for new legislation being introduced so that some common land which cannot be used for ordinary purposes may be used for the building of houses?

Sir T. Dugdale: That is another aspect of the same problem.

Sheep (Braxey Disease)

Mr. Crouch: asked the Minister of Agriculture if he can make a statement on recent research into braxey disease of sheep.

Sir T. Dugdale: Very full information about this disease and its prevention is already available and I do not know of any recent research. I am sending my hon. Friend a leaflet about the disease, issued by my Department.

Mr. Crouch: Can my right hon. Friend say whether this is an infectious or contagious disease, or one which suddenly occurs?

Sir T. Dugdale: I am advised that this disease is neither infectious nor contagious.

Eggs (Marketing)

Lieut.-Colonel Lipton: asked the Minister of Agriculture whether he has considered the draft scheme for egg marketing submitted by the Poultry Association of Great Britain; and what action he is taking thereon.

Sir T. Dugdale: I have considered this scheme, which in some respects goes far beyond the scope of the Agricultural Marketing Acts. Before taking any action on a proposed marketing scheme I am required by the Acts to be satisfied that the promoters substantially represent producers, and I am not so far satisfied that the Poultry Association of Great Britain fulfils this condition.

Lieut.-Colonel Lipton: Will the Minister give an assurance that the views of the Poultry Association will not be ignored, even though under the terms of the White Paper on Decontrol of Food only the National Farmers' Union has been invited to submit views on egg marketing? Will the right hon. Gentleman take into account the scheme submitted by the Poultry Association when he is considering permanent arrangements for egg marketing?

Sir T. Dugdale: The views of the Association will certainly be examined, along with all other views put before us.

RACE HORSE "GAY TIME"

Mr. E. Johnson: asked the Minister of Agriculture the nature of the ailment on account of which it was decided that the horse "Gay Time" was not suitable to be kept as a stallion at the National Stud.

Sir T. Dugdale: "Gay Time" developed an obstruction in the throat which seriously reduced his intake of air when galloping and made him unfit to race. The veterinary surgeons who examined the horse did not consider that the symptoms were those commonly associated with laryngeal paralysis, namely, whistling or roaring.

Mr. Johnson: Does my right hon. Friend think that there is a ready market in Japan for horses which have gone in the wind, and, if so, will he make that known to owners of such horses?

Sir T. Dugdale: I do not think that that arises. The veterinary report was made available to the Japanese Government, and it did say that the stallion was suitable for breeding.

Mr. Bence: Can the Minister give the House an assurance that this stallion had not been eating caponised cockerels?

Mr. E. Johnson: asked the Minister of Agriculture the position in regard to the free nomination to "Gay Time," on his retirement to the stud, which was given to the horse's previous owner as one of the conditions of his sale to the National Stud.

Sir T. Dugdale: I am communicating with the previous owner on this matter and will let the hon. Member know the position in due course.

Mr. Crouch: asked the Minister of Agriculture the contents of the veterinary report on "Gay Time" before conclusion of the purchase by the National Stud.

Sir T. Dugdale: The veterinary surgeon who examined "Gay Time" shortly before the purchase found him to be sound for racing.

Mr. Crouch: asked the Minister of Agriculture what bodies the National Stud consulted before paying £50,000 for "Gay Time"; and before selling him for £15,000.

Sir T. Dugdale: The decision to purchase "Gay Time" was taken after consultation with a small informal committee appointed to advise on the selection of stallions for the National Stud. Several prominent breeders, including the members of the committee, were consulted before it was decided to sell the horse.

Mr. Crouch: Is my right hon. Friend completely satisfied with the way in which the advice he receives is given to him? Does he not think that there should be an inquiry into the running of the National Stud?

Sir T. Dugdale: That is an entirely different question. I am absolutely satisfied, as far as this horse is concerned, and, at the end of the day, of course, whoever happened to find himself Minister of Agriculture must be responsible. As my hon. Friend, who takes an interest in this sport, realises, whenever a horse is discussed, many opinions are forthcoming on the subject.

SEAWEED FLY

Mr. H. Johnson: asked the Minister of Agriculture whether he is aware that the seaweed fly, known as coelopa frigid a, is now feeding on vegetation inland; and, having regard to the menace to food production, what action he proposes to take to destroy this plague.

Sir T. Dugdale: I have no evidence that the seaweed fly is feeding on inland vegetation or that it is a menace to food production. I know there has been some confusion in the Press and elsewhere between the seaweed fly (coelopa frigida) and another fly which infests mushroom-houses (megaselia plurispinosa). This fly has recently attacked crops in mushroom houses in the south-eastern counties and has caused considerable damage. Various insecticides have been used but are not entirely effective, and other methods of control are being actively studied.

Mr. Johnson: If I send my right hon. Friend some evidence—probably the pupae—of this fly living and thriving on Brussels sprouts, will he then take some action?

Sir T. Dugdale: Yes, Sir. We are constantly studying this matter. The reason


why I tried to pronounce these rather curious Latin names was because there has been a misunderstanding as to the exact type of fly. The second one is the dangerous one, and is doing the damage. We are doing all we can to exterminate it.

Lieut.-Colonel Lipton: Is there any evidence that this second fly, with the longer and more imposing name, has now reached London?

Mr. Johnson: Is my right hon. Friend aware that the specimen which I shall be sending him is the pupae of the coelopa frigida, which is the fly mentioned in my Question, and the one which is feeding on Brussels sprouts at the present time?

Sir T. Dugdale: If my hon. Friend can give me the evidence, I will, of course, look into it.

HOME DEPARTMENT

Flood Relief Parcels (Opening)

Mr. Dodds: asked the Secretary of State for the Home Department if all flood relief parcels have yet been opened at the London and Nottingham depots; and on what dates this work was completed.

The Secretary of State for the Home Department and Minister for Welsh Affairs (Sir David Maxwell Fyfe): Yes, Sir. The last parcel in the London and Nottingham depots were opened on 25th November. Some parcels had also been moved to a depot in Birmingham, and the last parcel there was opened yesterday.

Mr. Dodds: Is the Home Secretary satisfied with the information he has given? Does he think it is fair to all those good people who gave parcels last February? Can he say whether any of the goods have had to be destroyed because of the long time they have been kept?

Sir D. Maxwell Fyfe: I would require notice of the last part of the question, but I would refer the hon. Gentleman to the statement that was made about the use of the goods and to the fact that, owing to the generosity of the people, far more goods were supplied than were needed for actually dealing with flood distress.

Sexual Offences

Mr. Shepherd: asked the Secretary of State for the Home Department the number of cases involving male perversion in 1938 and 1952, respectively, and what complaints he has received from the police as to their lack of power to deal with this evil.

Sir D. Maxwell Fyfe: In 1938, the number of unnatural offences known to the police in England and Wales was 134, the number of attempts to commit unnatural offences (including indecent assaults on male persons and cases of importuning for immoral purposes dealt with on indictment) was 822, and the number of offences of gross indecency was 320. The corresponding figures for 1952 were 670, 3,087 and 1,686.
Similar figures are not available for offences of importuning by males for immoral purposes which are dealt with summarily, but I would refer my hon. Friend to my reply on 19th November to a Question by my hon. Friend the Member for North Fylde (Mr. Stanley) giving recent statistics of proceedings taken in the Metropolitan police district for this offence.
The answer to the second part of the Question is, "None, Sir."

Mr. Shepherd: Is it not a fact that senior police officials have stated that they are not able to deal with these cases as satisfactorily as they would wish, owing to lack of power and to other factors? Is it not also a fact that if the police are willing to act, and the magistrates are willing to receive the cases, the number brought daily before the Metropolitan courts would be very much larger?

Sir D. Maxwell Fyfe: Neither of these points has been brought to my attention. In view of my hon. Friend's question about powers I ought to remind the House that the maximum penalties for these offences are as follow:
Sodomy and bestiality—Life imprisonment.
Attempt to commit unnatural offence, and indecent assault on a male person—10 years.
Gross indecency—Two years.
Importuning—Six months on summary conviction, and two years on conviction on indictment.
There is no reason to think that these penalties are inadequate.

Mr. T. Williams: Can the House be told in how many cases, in each type of crime, the maximum penalty, or anything like it, has been imposed?

Sir D. Maxwell Fyfe: I should need notice of that question, but perhaps I could give the right hon. Gentleman an idea of the figures from memory—if he will not hold me to them. In 1952, there were 5,443 offences, and I think that about 600 offenders were sent to prison.

Sir R. Boothby: asked the Secretary of State for the Home Department whether Her Majesty's Government will recommend the appointment of a Royal Commission to examine the existing legislation in respect of sexual offences and the present treatment of adult sexual delinquents, with particular reference to homosexuality; and to make recommendations as to what changes are desirable in the light of modern scientific knowledge and of recent discoveries in the fields of psychology and psychiatry.

Mr. Donnelly: asked the Secretary of State for the Home Department whether he will recommend the appointment of a Royal Commission to examine the laws relating to sexual offences, and, in particular, those relating to homosexuality, and to make recommendations regarding any changes that are desirable; and what medical treatment can be provided in the light of modern scientific knowledge.

Sir D. Maxwell Fyfe: The general question of the law relating to sexual offences and of the treatment of sexual offenders is engaging my attention, but I am not yet in a position to make any statement.

Sir R. Boothby: Is my right hon. and learned Friend satisfied that the law, particularly Section 2 of the Criminal Amendment Act, 1885, is really effective and workable? Is he satisfied with the present institutional treatment? Does he not think further research into the problem, perhaps beyond purely Departmental research, is urgently required?

Sir D. Maxwell Fyfe: As my hon. Friend has raised the point I must make this clear. I gave earlier today figures of convictions and offences, and I must make clear to the House that one element in dealing with this matter is the

protective element in punishment, because homosexuals in general are exhibitionists and proselytisers and are a danger to others, especially the young, and so long as I hold the office of Home Secretary I shall give no countenance to the view that they should not be prevented from being such a danger.
On the second point about treatment, I should like to assure the House, as I tried to do in the debate on prisons, as some hon. and right hon. Gentlemen still remember, that we are very much alive to the problem in our prisons today and there are arrangements made for medical attention, especially of a psychiatric kind, but, as I said then, I must remind the House that the difficulty in these cases is that for treatment to be successful there must be co-operation, and in many cases co-operation is refused.
The third point that one must always bear in mind is that, apart from the true invert, there are homosexuals who use that instead of ordinary sexual intercourse, and in addition to them, the male prostitutes who come up on these importuning cases and the sensationalists who will try any form of excitement and indulgence. These three types of cases, apart from the male invert, can, I believe be dealt with, and are being dealt with, by our prison system. These things must be rememebered when we consider this matter. As I have said, I am trying to study and give my careful attention to the whole problem, but it would be wrong not to stress these points today.

Mr. Stokes: Will the Home Secretary bear in mind in his deliberations the importance of impressing upon the authorities concerned that while respecting the rights of the defendants they will also regard it as obligatory to reduce to the absolute minimum the publicity and strain imposed upon juveniles who are mixed up in adult cases?

Sir D. Maxwell Fyfe: I entirely agree. It is a very difficult subject indeed, but one that must be borne constantly in mind. That was the idea behind my answer, as I am sure the House appreciates.

Mr. Donnelly: In view of the public disquiet about this matter, will the right hon. and learned Gentleman be willing to receive a deputation, consisting of the


hon. Gentleman the Member for East Aberdeenshire (Sir R. Boothby) and myself, on this subject?

Sir D. Maxwell Fyfe: Yes, I am quite willing to meet anyone who has ideas on the subject, but I do want it to be clear that as Home Secretary I have the duty to protect the people, especially the youth, of this country.

Brigadier Medlicott: Is it not a fact that public opinion itself has been at fault for a great many years in treating the question of homosexuality as a fit subject for music hall humour—[HON. MEMBERS: "Oh."]—yes, and that if the public itself can be persuaded to approach this matter in the right way from both the criminal and the medical point of view much good may be done?

Mrs. Braddock: When considering these matters will the right hon. and learned Gentleman very carefully consider the medical aspect, because many magistrates who understand the situation are very reluctant indeed to give terms of imprisonment in these cases because of overcrowding in prisons where men are put two and three into a cell? It is considered that sending them to prison accentuates the trouble rather than cures it.

Sir D. Maxwell Fyfe: I am glad that the hon. Lady has raised that point. It is quite true that they are put three in a cell; unfortunately, owing to shortage of space, there are about 5,000 people who are three in a cell. This matter has been carefully examined, and I believe that the chances of increasing homosexual inclinations from that have been greatly exaggerated. Although, of course, homosexuality exists in prisons—as Sir Alexander Paterson said, you cannot help it in a "monastery of men unwilling to be monks"—I think the effect has been exaggerated. My experience is that there is not much increase of inclination. We have not been able to find any evidence of it.

Mock Auctions (Legislation)

Mr. G. Williams: asked the Secretary of State for the Home Department if he will now take action to make mock auctions illegal.

Sir D. Maxwell Fyfe: I can hold out no hope that the Government will be able

to find time to introduce legislation on this subject.

Mr. Williams: Is the Home Secretary aware of the damage and annoyance which is done to the public, chiefly in seaside towns? Would not he consider, at any rate, bringing in a system of licences which would give some protection to the vulnerable public?

Sir D. Maxwell Fyfe: I would refer my hon. Friend to the statement of the Joint Under-Secretary of State on this point. The other side of the question is that the abuse is confined to a small number of areas, and I am sorry that at present it would be impossible to justify the appearance of such a Measure in the legislative queue.

Education, Wales

Mr. G. Thomas: asked the Secretary of State for the Home Department under what authority he exercises his administrative powers in connection with education in Wales.

Sir D. Maxwell Fyfe: I have no administrative powers in connection with education in Wales except in regard to the provision of education for prisoners and Borstal inmates, in pursuance of the statutory rules made under Section 47 of the Prison Act, 1952, and for children and young persons in approved schools and in remand homes in pursuance of the statutory rules made under the Children and Young Persons Act, 1933.

Mr. Thomas: In dealing with the normal Welsh—[An HON. MEMBER: "Where are they?"]—does the Minister indicate that he has no administrative powers at all? Are they completely in the hands of the Minister of Education?

Sir D. Maxwell Fyfe: I have no administrative powers, but I hope I am not too conceited in saying that I have a certain amount of persuasive power. Of course, that does not rank with the persuasive powers of the hon. Member himself—persuasive powers which he exercised when he invited me to come to a school in his constituency.

Mr. Gower: Is it not a fact that the Department of Education is the one Department where there is a very considerable amount of devolution in Wales?

Sir D. Maxwell Fyfe: It is not the one Department; it is one of several Departments—especially the four mentioned by the Council of Wales—where there has been, I am glad to say, considerable devolution, as my hon. Friend says.

Mental Deficiency Act (Examination of Children)

Mr. A. J. Irvine: asked the Secretary of State for the Home Department whether, in cases where a child is examined under the procedure referred to in Section 9 of the Mental Deficiency Act, 1913, it is the practice of his Department to permit, if the child's parents desire it and at their own expense, an examination of the child by an independent medical expert of the parent's choice and to give consideration to the report following such examination.

Sir D. Maxwell Fyfe: Section 9 of the Mental Deficiency Act, 1913, empowers me to order the transfer to a suitable institution, or the placing under guardianship, of a child detained in an approved school or, in certain circumstances, in a remand home, if I am satisfied from the certificates of two qualified medical practitioners that the child is a defective. Such certificates are considered most carefully, in the light of the medical advice available to the Home Office, before any action is taken on them.
I am prepared to give favourable consideration to requests by parents for an examination by a doctor of their own choice where there is reason to think that the further opinion would be of value. In the few cases where such requests have been made hitherto it has not been considered that a further examination would serve any useful purpose.

Mr. Irvine: Is the right hon. and learned Gentleman aware that his answer gives satisfaction only up to a point? Is he prepared to agree that it is undesirable, in principle, that a parent of a child in this situation should not be given the opportunity of having an independent examination carried out, and for the right hon. and learned Gentleman not to have regard to the report resulting there from?

Sir D. Maxwell Fyfe: As I have said, I am personally prepared to consider each case, and I would remind the hon.

Gentleman that this is one of the subjects that, I think, will be considered by the Royal Commission. I find that on this subject there is a good deal of difference of opinion among people with the same end in view, to do the best for the child. I will certainly consider what the hon. Gentleman has said. I am sure the Royal Commission will, too.

Mr. MacColl: Does the right hon. and learned Gentleman exercise these powers in the case of moral defectives as well as mental defectives, that is, children who are not in the normal sense of the term backward educationally but who are said to be morally unstable? If so, will he be particularly careful to distinguish between moral defectives within the meaning of the Act and just very naughty children?

Sir D. Maxwell Fyfe: On the last point, yes. On the first, there is, as the hon. Gentleman knows, a definition in the Act of 1913, and whether that definition is satisfactory is another of the points that, I am sure, the Royal Commission will consider.

Welsh Statistics (Publication)

Mr. S. O. Davies: asked the Secretary of State for the Home Department if he will now cause to be published a digest of statistics relating to Wales as is being done for Scotland in the Digest of Scottish Statistics.

Mr. Peter Freeman: asked the Secretary of State for the Home Department whether he will issue annually or bi-annually a Digest of Welsh Statistics along lines similar to those for Scotland.

Sir D. Maxwell Fyfe: The Government propose in future to publish a separate annual Digest of Welsh Statistics at the same time as the annual Report on Government Action in Wales and Monmouthshire.

Mr. Davies: Is the right hon. and learned Gentleman aware that that answer will give some satisfaction to the people of Wales at long last? However, will the right hon. and learned Gentleman take counsel with the Chancellor of the Exchequer with a view to having the Chancellor change his attitude on the very important question relating to statistics


that I put to him yesterday, that if these statistics are omitted from the Digest the Digest will be very imperfect indeed?

Sir D. Maxwell Fyfe: I shall certainly look carefully at the exchanges between the hon. Gentleman and my right hon. Friend and welcome any chance of a talk with him on Welsh matters.

Mr. Gower: Is my right hon. and learned Friend aware that this is one of the few occasions when people of Conservative and other opinion in the Principality will agree with the opinion of the hon. Member for Merthyr Tydvil (Mr. S. O. Davies)?

Air Raid Shelters, Birmingham (Demolition)

Mr. Shurmer: asked the Secretary of State for the Home Department if he is aware that many air raid shelters in courtyards and on bombed sites in Birmingham, are a menace to the health of the people and also a help to crime; and if he will now give permission for these shelters to be demolished.

Sir D. Maxwell Fyfe: As regards danger to health, I am prepared to authorise demolition in any case where the medical officer of health certifies that it is essential on health grounds. As regards crime, I am informed that the police asked for the blocking up of the entrances to a number of shelters. That work has now been done and the police are satisfied.

Mr. Shurmer: Is the Home Secretary aware that, while these air raid shelters were necessary during the war, it is now eight years since the end of the war, and that many of these shelters are within four or five feet of people's homes? There is only one outlet, they prevent children from playing and also prevent people who have small houses from using their yards in order to hang out washing. Is he aware that the Birmingham Medical Officer of Health has already said that they are detrimental to health? Furthermore, is the Home Secretary aware that he is impinging upon the byelaws of Birmingham, which lay down that no building shall be within 12 feet of a house?

Sir D. Maxwell Fyfe: I hope no one will suggest that all Civil Defence shelters should be demolished. We are continuing the policy of our predecessors in that they should be preserved as part of the Civil

Defence effort. I have already said, and I repeat, that I am prepared to consider demolition where the medical officer of health certifies that it is essential on health grounds.

Unaccompanied Children (Cinema Attendance)

Mrs. White: asked the Secretary of State for the Home Department what action he proposes to take on the recommendations by the Cinema Consultative Committee concerning the proposed ban on the admission to cinemas of unaccompanied children under five years of age and on unaccompanied children under 12 years of age after 8 o'clock at night.

Sir D. Maxwell Fyfe: I would refer the hon. Member to the reply which I gave on 12th November to a Question by the hon. Member for Greenwich (Mr. Reeves).

Mrs. White: Can the right hon. and learned Gentleman tell us how much longer it will be before he names the day? [Laughter.] The day to which I am referring is in connection with the Cinematograph Act, 1952.

Sir D. Maxwell Fyfe: The Regulations which are necessary before the Act can be brought into force are being drafted. I hope the hon. Lady will not make a shotgun approach to it, but I can say that the day will be early in the New Year. At least, that is what I hope.

Drunkenness, City of London

Mr. Gibson: asked the Secretary of State for the Home Department whether he is aware that the White Paper on Offences for Drunkenness discloses that there are three times as many convictions for drunkenness in the City of London as there are in the next worst town for this offence in the whole country and that the figures are 227·66 per 10,000 of the population against 73·98 for Middlesbrough; and whether he will take steps to deal with this state of affairs.

Sir D. Maxwell Fyfe: Yes, Sir; but the actual number of these offences in the City of London was no more than 107. Much as I regret these offences, I see no reason to suppose that the unusually large proportion which they bear to the City's population is due to anything other than the fact that the City's


resident population is unusually small in proportion to the number of people who frequent it.

Mr. Gibson: Is the Minister aware that these proportions show quite clearly a drunkenness ratio three times worse in the City than in Middlesbrough? If that is so, would it not be a good idea for the Minister to encourage the Temperance Alliance to run a campaign in the City?

Sir D. Maxwell Fyfe: Great as are the charms of Middlesbrough—Macaulay said,
And pined by Arno for my lovelier Tees"—
nevertheless, the number of people who visit it is distinctly smaller than the number who go into the City of London.

Mr. Marquand: Is the right hon. and learned Gentleman aware that Middlesbrough is an orderly and well-administered town and is not seeking his assistance in this matter?

Mr. J. Hudson: I appreciate the point the right hon. and learned Gentleman made about population, but is it not true that in the City and in London generally there is the special problem of the additional drink facilities which are provided by clubs? As he has done nothing so far, despite his promise, will he say whether he has this matter still in mind?

Sir D. Maxwell Fyfe: I have the problem of clubs very much in mind.

CIVIL DEFENCE

Manpower (Use)

Sir I. Fraser: asked the Secretary of State for the Home Department what arrangements have been made for mutual support and working together between Civil Defence units and the Home Guard in order to make the best possible use of available manpower in an emergency.

Sir D. Maxwell Fyfe: The general arrangements for assistance by the Home Guard to Civil Defence are now in process of being worked out in detail at regional and local level in conjunction with Army commands and districts. In many areas, joint discussions on deployment of forces have taken place; a number of local authorities have started to give instruction in Civil Defence to

the Home Guard; and a beginning has been made with participation by the Home Guard in Civil Defence exercises.

Sir I. Fraser: Are the Government still of the opinion that these forces represent the most economical way of using these men and women?

Sir D. Maxwell Fyfe: Certainly. There is, in my view, no question of amalgamating two fundamentally different forces which deal with different aspects of the problems that might arise.

Staff College

Mr. Ian Harvey: asked the Secretary of State for the Home Department why it is not possible, for salary purposes, to equate appointments at the Civil Defence Staff College with those at the Army and Royal Air Force Staff Colleges, respectively, having regard to the fact that he has stated that Civil Defence is the fourth arm of defence.

Sir D. Maxwell Fyfe: The salaries of the commandant and instructors at the Civil Defence Staff College, like those of the directing staff at the Civil Defence Training Schools, are determined in relation to the general standard of Civil Service remuneration. Senior posts at the Army and Royal Air Force Staff Colleges are held by serving officers on Service rates of pay.

Mr. Harvey: While appreciating the logic of the argument, as my right hon. and learned Friend has already stated the importance of equating the service of Civil Defence with the other military services, may I ask whether it would not now be reasonable to bring them into line?

Sir D. Maxwell Fyfe: I am sure my hon. Friend will appreciate that when I say, as I have said many times, that Civil Defence is the fourth arm of defence I mean what I say, but it is difficult to equate civil service to Army rates of pay, when those in the Fighting Services hold jobs which are part of the routine of those Services.

Mr. Ian Harvey: asked the Secretary of State for the Home Department how long the proposed establishment scheme for the directing staff of the Civil Defence Staff College and officers of other civil defence training schools has been


under consideration, and when he estimates that he will be able to announce his proposals.

Sir D. Maxwell Fyfe: I will endeavour to bring the issue of establishment to finality as soon as possible, but until that has been resolved I shall not be able to announce details of any establishment scheme.

Mr. Harvey: Is my right hon. and learned Friend aware that this has been going on for a long time, both since he took office and also under his predecessor, and that it is not encouraging for those who would like to join this important service to feel that they are not part of an established scheme?

Sir D. Maxwell Fyfe: I realise that there has been pressure for this since the middle of 1951, and I shall do the best I can to resolve the problem.

Mr. Ian Harvey: asked the Secretary of State for the Home Department what accommodation has been provided for instructors at the Civil Defence Staff College; how many of these instructors are in fact occupying this accommodation; how many are living in private accommodation; and how far the accommodation provided is up to the same standard as that which was originally planned for the college.

Sir D. Maxwell Fyfe: Seven instructors occupy single quarters in the college, four occupy houses provided in the neighbourhood, and four others occupy private accommodation. The accommodation provided is somewhat below the standard originally planned.

Mr. Harvey: Is my right hon. and learned Friend aware that this Question and the two preceding it are intended to direct his attention to the importance of making this College, which is the key to instruction in Civil Defence, a recognised establishment, and that, unless this is done, a very important part of the Civil Defence organisation is likely to fall below the standards which the rest of the organisation is so easily achieving?

Sir D. Maxwell Fyfe: I very much appreciate the spirit behind these Questions, which is to encourage Civil Defence, but I am sure that my hon. Friend would be the last to desire to give the impression that, although these

administrative difficulties are there, the Civil Defence Staff College has, in any way, fallen below the high standard which everyone in the House knows it has attained, and which I am sure it will keep.

POLICE

Speed Controls, London (Operation)

Mr. Shepherd: asked the Secretary of State for the Home Department what considerations the Commissioner of Police has in mind when he fixes speed traps in the London area.

Sir D. Maxwell Fyfe: The Commissioner of Police informs me that fixed speed controls in the Metropolitan police district are operated in places where the speed limit is habitually disregarded, especially where the accident record is bad.

Sir H. Butcher: Is it not a fact that one policeman in uniform would save a lot of manpower and prevent many offences?

Sir D. Maxwell Fyfe: I do not think so, but I will consider any suggestions which are made.

Widows' Pension

Mr. Dodds: asked the Secretary of State for the Home Department if, in view of the hardship being experienced by many elderly police widows who are still receiving the 1921 rate of 11s. 6d. per week pension, he will take the necessary steps to have the pension increased; and how many widows there are in this category.

Brigadier Medlicott: asked the Secretary of State for the Home Department if he is aware of the difficulty in which elderly police widows are placed who are only receiving the 1921 rate of pension; and if, in view of the fact that the aggregate amount of these pensions is a diminishing liability on the State, he will recommend an increase in the pension in this class of case.

Sir D. Maxwell Fyfe: Most police widows originally awarded pensions at the rate of 11s. 6d. a week have had them increased under the Police Pensions Regulations, 1948. There are estimated


to be about 150 police widows whose pensions of 11s. 6d. a week have not been increased, because they are not handicapped by age, children or infirmity, or because their total income is above the prescribed limit. I regret that I cannot see my way to propose further increases.

Mr. Dodds: Does the right hon. and learned Gentleman realise that those who understand these cases are bitterly disappointed that these women have not been given an increase, and consider that they have been very badly served in view of the small amount of money involved?

Sir D. Maxwell Fyfe: I am sure that no one who has had to deal with these pension claims can feel anything but regret for the position which one feels it is right to take up. I know—and I am sure that anyone who has held my office knows—the tremendous help which the wives of policemen give their husbands in their work, but I should point out to the hon. Gentleman that the basic pension, apart from the increases that I have mentioned, can be further increased to £85 a year—that is, 32s. 6d. a week—if the widow satisfies National Insurance Scheme conditions. It is difficult to conceive that the police widows who do not fulfil the conditions which I have mentioned are hardship cases.

Deaf Mute, Carmarthen (Interrogation)

Mr. Edward Evans: asked the Secretary of State for the Home Department whether the Scotland Yard officers who interrogated and took a statement from the defendant Roberts, a deaf mute, subsequently charged with murder and acquitted at the Carmarthenshire Assizes in March of this year, had the assistance during the interrogation of a qualified welfare worker for the deaf or a teacher of the deaf.

Mr. S. Silverman: asked the Secretary of State for the Home Department in what circumstances two senior officers from Scotland Yard obtained from Mr. George Roberts, who has been deaf and dumb since birth and who has never been taught any known sign-language, an eight-page written and signed confession of murder, of which he was subsequently acquitted on indictment.

Sir D. Maxwell Fyfe: On the occasion in question, Mr. Roberts first answered

questions through a police officer who has a command of the deaf and dumb alphabet and signs. These questions and answers were subsequently repeated to Mr. Roberts, one by one, through a competent and experienced lady interpreter, who reported that he fully understood them and that they were accurately recorded. Mr. Roberts did not sign the record.
The interpreter has worked for 19 years with the Llanelly and West Wales Mission to the Deaf and Dumb and has for many years acted as interpreter at Llanelly Magistrates' Court. She was assisted by her husband, who is himself deaf and partially dumb, and has been engaged in similar work for 35 years. Although Mr. Roberts does not know the deaf and dumb alphabet, the interpreter stated that she found no undue difficulty in communicating with him by means of signs and gestures commonly used by illiterate deaf mutes.

Mr. Evans: I thank the right hon. and learned Gentleman for that very full answer, but is he aware that all those who are interested in deaf welfare, including the principal societies, feel that when a deaf person is first charged with a criminal offence it is incumbent that he should be accompanied by a qualified deaf teacher, missioner, or one who has some kind of academic record and qualifications, in order that he shall understand the full implication of the charge, and to safeguard him in any answer he might make to it?

Sir D. Maxwell Fyfe: I entirely agree that the greatest possible care should be taken in dealing with such cases. If I may interpose a personal experience, I defended, on a criminal offence, someone who was not only deal and dumb but blind, so I do know the problem from practical experience. The reason why I rather developed my answer was that I wanted to say that the lady in question and her husband had had great experience. I should like to consider this point, and I shall certainly bear in mind the suggestion which the hon. Gentleman has made.

Mr. Silverman: Is the right hon. and learned Gentleman aware that Mr. Roberts knew no sign language at all? Is he also aware that on the occasion to which he refers there was also present


an educated and literate deaf mute who had known Mr. Roberts for 26 years, who was recognised as the only person who could communicate to him, and who has since stated in writing that, so far from admitting the offence, Mr. Roberts gave a flat and emphatic denial to it? Is the right hon. and learned Gentleman further aware that none of the facts which are contained in his answer, and which would seem to establish the authenticity of the evidence, were ever placed before the judge and the jury at the trial at which this man was acquitted?

Sir D. Maxwell Fyfe: I am very sorry that I cannot accept the statements which the hon. Gentleman has made without further investigation, but I shall certainly investigate them. I am surprised at what he says, because I have the transcript in front of me, and the name of the lady I mentioned appears as having given evidence at the trial. Unless my transcript is wrong I do not think that the second part of what the hon. Gentleman says can be right.

Mr. Silverman: The right hon. and learned Gentleman is perhaps under a misconception. Is it not the case that this man was ultimately acquitted because the prosecution offered no evidence against him, in the circumstances that they admitted that the only evidence they had was this alleged confession which they were not in a position to prove, and no attempt was made to prove it in court?

Sir D. Maxwell Fyfe: The name of the lady I mentioned appears in the transcript, and her examination covers pages 44 to 46. At that time a submission as to admissibility was made. That was replied to; there was a decision and, after that, the prosecution made a statement in the matter. What the hon. Gentleman said surprised me, in view of the fact that this lady gave evidence at the trial.

Mr. S. Silverman: asked the Secretary of State for the Home Department what compensation has been offered to Mr. George Roberts who was detained and imprisoned for several days, without a warrant and without a charge being made, for the purpose of interrogation; and whether he has considered the remarks of Mr. Justice Devlin in directing the jury to acquit him, the prosecution offering no evidence against him.

Sir D. Maxwell Fyfe: I have considered the remarks made by Mr. Justice Devlin and have had full inquiry made. I am informed that on the morning of 11th January, 1953, Mr. Roberts was asked to go to Carmarthen police station in order that he might be questioned through a competent interpreter and readily agreed to do so. He remained there until 14th January, but he was under no compulsion to do so. On the contrary, he was clearly told each day that he was free to go home for the night, but he indicated that he would prefer to remain at the police station and was allowed to do so. He was not at any time detained in a cell and was treated with every consideration. I can find no grounds for any ex gratia payment to him from public funds.

Mr. Silverman: Will the right hon. and learned Gentleman make it perfectly clear—because so far he has not done so—that it is not now contended that Mr. Roberts ever did confess to murder or that he had anything whatever to do with this crime? Secondly, does he agree with the statement made by Mr. Justice Devlin that there is no power whatever in this country to compel anyone to answer questions and still less to detain him for three days in a police station, whether in the daytime or at night time, in order to compel him to do so?

Sir D. Maxwell Fyfe: On the first point, nobody asked me to asseverate the matter. The prosecution, of course, offered no evidence and Mr. Roberts is an innocent man. That follows, and that is why I did not mention it. I am very glad that the hon. Member has referred to what, if I may say so with respect, were the most useful remarks of Mr. Justice Devlin, that there is nothing in our country such as, to use his words, novelists and writers of "shockers" call "detaining for questioning." A man cannot be detained for questioning. A charge must be brought and he must be brought up before the magistrate. I thought that was a most useful thing to emphasise.

Mr. Silverman: In view of that statement, for which we are all very grateful indeed, does not the right hon. and learned Gentleman realise that this man was, in fact, detained for more than three


days in a police station without a charge being made and only for the purpose of questioning; and that, in view of what is now known about the impossibility of communicating with him, it is quite unsafe for anyone to suppose that he was a voluntary guest there? In those circumstances, will he not reconsider the matter from the point of view of giving the man adequate compensation for the detention which he undoubtedly suffered?

Sir D. Maxwell Fyfe: I appreciate the hon. Member's feelings, but I have read the case over and over again and considered it very carefully. I am sorry, but I cannot go as far as the hon. Member suggests.

Mr. S. Silverman: asked the Secretary of State for the Home Department who were the two senior police officers at Scotland Yard who were engaged upon the case of Reginav.Roberts, a trial for murder; and upon what duties they are now engaged.

Sir D. Maxwell Fyfe: The two officers were Detective Superintendent Spooner and Detective Sergeant Millen. Superintendent Spooner is attached to the Central Detective Office at New Scotland Yard. Sergeant Millen is on a course at the Police College.

Mr. Silverman: I have no supplementary question to ask on this Question but, having regard to the unsatisfactory answer to the previous Question, I beg to give notice that I shall endeavour to raise the matter on a suitable occasion.

U.S.A. Methods (Study)

Mr. Edelman: asked the Secretary of State for the Home Department which members of his staff visited the United States of America recently to study American police methods; what new experience they have gathered; and what action he intends to take in consequence of their visit.

Sir D. Maxwell Fyfe: I would refer the hon. Member to the reply which I gave on 12th November to a Question by my hon. Friend the Member for Henley (Mr. Hay).

Mr. Edelman: Is the right hon. and learned Gentleman aware that, without any disrespect to the excellent officers concerned, the visit was received with

some astonishment in American towns where the problems which they investigated are more rampant and far less effectively dealt with than in this country? Will he give the House an assurance that he will be highly selective in introducing American police methods into this country?

Sir D. Maxwell Fyfe: Yes. The second question was really outside the considerations which I mentioned in answer to the Question of my hon. Friend. That was the study of the treatment of certain forms of offence which I think everyone will agree always provide one of the most difficult problems in the world.

Mr. H. Morrison: Will the right hon. and learned Gentleman consider inviting, as a friendly reciprocal action, an American police delegation to come here to study police methods so that we may both help to improve each other?

Sir D. Maxwell Fyfe: I am sure that that is what we all want.

BUSINESS OF THE HOUSE

Mr. Attlee: May I ask the Lord Privy Seal to state the business for next week?

Mr. Crookshank: Yes, Sir. The business of the House will be as follows:

MONDAY, 7TH DECEMBER—Second Readings: Consolidated Fund Bill.

Statute Law Revision Bill [Lords].

Motions to approve: Import Duties (Exemptions) (No. 5) Order, which relates to sulphuric acid.

Two Draft Lace Industry Orders.

At the request of the Opposition, we have so arranged business on Monday which we hope will result in the Prayer relating to the Draft British Guiana (Constitution) Temporary Provisions Order being moved at an early hour.

TUESDAY, 8TH DECEMBER—Debate on the Second Memorandum of the Council for Wales and Monmouth shire and the White Paper on Rural Wales, which will arise on a Government Motion.

I should remind the House that this is not the annual debate on Welsh affairs, but is an exceptional arrangement.

Committee and remaining stages: Electoral Registers Bill.

WEDNESDAY, 9TH DECEMBER—Second Reading: Housing (Repairs and Rents) (Scotland) Bill.

Committee stage: Money Resolution.

Motion to approve: Post Office (Transatlantic Telephone Cable) Contract.

THURSDAY, 10TH DECEMBER—The business will be announced later.

FRIDAY, 11TH DECEMBER—Private Members' Motions.

If—I say "if"—all the necessary business can be disposed of, it is hoped that the House will adjourn on Friday, 18th December, for the Christmas Recess.

Mr. Attlee: I wish to ask the right hon. Gentleman two questions. First, I think it is generally agreed that we wish to have a debate on foreign affairs after the Bermuda Conference. Would it be possible for him to arrange that it should be a two days' debate? Secondly, I do not know whether the Government intend to proceed with their television proposals, but I think the House ought to have a two days' debate on that subject if it is so intended to proceed.

Mr. Crookshank: If we are to debate everything over two days, the "if" with which I began my sentence about the Christmas Recess on Friday, 18th December, will not be achieved. But I take note of what the right hon. Gentleman has said on both these topics.

Mr. Attlee: The right hon. Gentleman will remember that when the Conservative Party were in Opposition, the present Prime Minister almost always asked for three days on everything.

Sir I. Fraser: Can we be told the date when we come back in January?

Mr. Crookshank: No, Sir. The hon. Gentleman is asking a little too much.

Mr. H. Morrison: Is it not reasonable that the House should know when it is likely to return? That information would help Members to make their arrangements to visit their constituencies or to undertake other engagements. We are only a fortnight off the intended adjournment, and I think that by now it would be reasonable if the right hon. Gentleman would give the dates for our resumption after Christmas.

Mr. Crookshank: I will inform the House as soon as I can. I can give hon. Members that assurance, but I really cannot give the date today.

Mr. Logan: In view of the Motion on the Order Paper, does the right hon. Gentleman intend this year to deal with the question of Cardinal Wyszynski? Will he provide an opportunity to debate the matter next Thursday, as he has said that that is a vacant date.

Mr. Crookshank: I do not know about next Thursday. As I told the House the other day, we all feel the greatest sympathy with this Motion, and I should like to get a short debate in if I can. If I cannot there will be the Christmas Adjournment debates, of course, and perhaps Mr. Speaker might look upon this subject with a favourable eye.

Mr. Shinwell: In connection with the recent court-martial of Captain Griffiths, while there is no question of a re-trial, and that will not be my suggestion, would the Government agree to publish a White Paper containing a full report of the proceedings so that they can be made available to every hon. Member. As this is a matter of great public interest would it not be wiser to do this than to leave Members to queue up in the Library to read the report?

Mr. Crookshank: It is not my function to promise White Papers on Departmental matters. If the right hon. Gentleman means a transcript of the evidence, it would be something most unusual in the case of a court-martial, or any other trial, that it should be produced as a White Paper; but I gather that he was speaking more in terms of a report, and I will gladly put that question to my right hon. Friend.

Mr. Shinwell: I did give notice yesterday to both the right hon. Gentleman and to the Secretary of State for War that I intended to ask a question on behalf of the Opposition. It is not a summary of the proceedings which we require but a full report, so that Members may have the evidence of the whole of the proceedings, which is necessary if we are to form a considered opinion on the case itself.

Mr. Crookshank: I note what the right hon. Gentleman has said.

Mr. Shinwell: If the right hon. Gentleman has noted it, can he not at any rate give a provisional assurance that the Government will consider the matter and try to meet the wishes of hon. Members?

Mr. Crookshank: My whole purpose in life is to try to meet the wishes of hon. Members, but what the right hon. Gentleman has asked for is something quite unprecedented. The evidence has, I understand, been placed in the Library and is, therefore, to that extent available—[Hon. Members: "No."]—or it will be in the Library, I understand, if it has not yet arrived. I will, of course, consider anything which the right hon. Gentleman has said, but I must not be taken as accepting his suggestions.

Mr. Strachey: Does not the Leader of the House appreciate that this is a matter which involves the honour of the British Army? It is precisely so that hon. Members may satisfy themselves that nothing has been done outside the actual matter of the trial which profoundly concerns us all that we wish to satisfy ourselves that nothing which impinges on the honour of Her Majesty's Forces has occurred? The only way that can be done is to have a printed transcript so that all hon. Members may have access to it. In the interests of the Army it seems to me that it is of great importance that this should be available.

Mr. S. Silverman: In view of the right hon. Gentleman's declared intention to give priority to meeting the wishes of hon. Members, may I again press him about the provision of time by the Government for the discussion of the Report of the recent Royal Commission on Capital Punishment? I quite appreciate the right hon. Gentleman's difficulties, but I would point out that this is an important matter and that it would be quite wrong to shelve it because some of its aspects happen to be controversial.

Mr. Crookshank: I do not think there is any suggestion of shelving anything. As the hon. Gentleman has pointed out, these things are matters of priority. I do not see any opportunity in the immediate future of a debate on this subject.

Mr. Silverman: Will the right hon. Gentleman bear this in mind for, if not the immediate, the not too remote future?

Mr. Snow: Has the right hon. Gentleman's attention been drawn to a report in today's newspapers to the effect that a Kenya administrative officer who has been convicted of a crime of brutality in Tanganyika is to be reinstated in his position, bearing in mind that this House has a duty in this matter under Trusteeship Council responsibility to the United Nations? Could we have a debate on this matter?

Mr. Crookshank: A report has been called for from both the Governments concerned.

Mr. Hector Hughes: Reverting to the Motion about Cardinal Mindszenty—[Laughter.]—does the right hon. Gentleman realise that this is not a small sectarian matter but is a broad question involving human rights and democracy, for which time should be found? Will he provide us with an opportunity of discussing it?

Mr. Crookshank: I cannot go further than I have done. Lest there should be any misunderstanding, I hope that the laughter which was heard will be taken as referring to a slip of the tongue; the hon. and learned Member used the wrong name. It does not mean that anybody in the House thinks that this is a laughing matter—it is a most serious matter.

Mr. Hughes: I thank the right hon. Gentleman for the correction.

Mr. Harold Davies: In view of the fact that we are having the Prayer on British Guiana on Monday night, will the Leader of the House make available to Members the special Report of the Select Committee on Statutory Instruments, which contains relevant matter regarding the laying of Orders and Drafts on the Guiana Constitution? Will this be available for us before the Prayer?

Mr. Crookshank: It is not within my province as to when the Statutory Instruments Committee reports, but by their courtesy I have been informed that there is a special Report which should be available to the House tomorrow.

Mr. Davies: I thank the right hon. Gentleman.

Mr. Manuel: The Housing (Repairs and Rents) (Scotland) Bill, the Second Reading of which is to be taken on


Wednesday, has a very wide scope, and every Scottish Member on this side will want to take part in it. This Bill needs exploring to the fullest extent on Second Reading. Can the Rule be suspended so that the debate may go beyond 10 o'clock?

Mr. Crookshank: If representations are made for a short extension, something might be arranged. But the hon. Member must not think that necessarily every Scottish Member would be called any more than every English and Welsh Member was called on the Second Reading of the other Bill.

Mr. H. Morrison: As the Minister of Housing and Local Government finally, in response to a request made not only by me, but by others as well, did not move the Financial Resolution on the other Bill, and as Scottish local authorities have similar problems, would the right hon. Gentleman be good enough to indicate that the Financial Resolution on the Scottish Bill will not be taken on Wednesday night?

Mr. Crookshank: Without the presence of my right hon. Friend, I cannot make any comment on that subject on the spur of the moment. I am not sufficiently aware of the details to know whether both cases are on all fours, but I will make the point to my right hon. Friend on behalf of the right hon. Gentleman.

Proceedings on Government Business exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[Mr. Crookshank.]

Orders of the Day — CURRENCY AND BANK NOTES BILL

Order for Second Reading read.

3.44 p.m.

The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter): I beg to move, "That the Bill be now read a Second time."
This Bill was forecast by my right hon. and learned Friend the Home Secretary during our recent debate on the continuance of the Supplies and Services legislation. Its main purpose is to carry forward what was then indicated to be the policy of the Government—that is, replacement of such emergency powers as need to be continued for some time by permanent legislation. The Bill covers the ground at present covered by Defence (Finance) Regulations 7AA and 7AB. In Clause 4 (2) of the Bill, provision is made for their revocation on the Bill becoming law.
The Bill also clears up what had become in some degree the confused state of the law in respect of the issue of bank-notes. The issue of bank-notes is the subject matter of Defence (Finance) Regulation 7AB, while Defence (Finance) Regulation 7AA deals with the fiduciary note issue. The Bill, therefore, falls into two parts, embodied respectively in Clauses 1 and 2, which are the main operative Clauses of this short Bill. Clause 1 deals with the issue and recall of bank-notes by the Bank of England. To make it, I hope, reasonably comprehensible to the House, I ought, perhaps, to sketch in the background.
Under common law, the Bank of England could issue notes of any denomination, but in 1826 the power to do so was restricted by statute to notes of £5 and upwards. Under the Currency and Bank Notes Act, 1914, Treasury notes were issued for £1 and 10s., but under the Act of the same title which Parliament passed in 1928, these notes were amalgamated with Bank of England notes and the Bank, therefore, was given the power also to issue £1 and 10s. notes. The present position, therefore, is that the Bank has the right to issue notes of £5 and upwards, and, below £5, notes of £1and 10s. only.
As it happens, all notes above £5 in value have been called in and demonetised, although I believe that in practice a good many of these notes still remain in the hands of the public. But the only legal tender notes now in circulation are those for £5, £1 and 10s. Under existing statute the Bank can, if it so wishes, call in and demonetise the £1 and 10s. notes, but it depends upon the power given in Defence (Finance) Regulation 7AB for the right to call in notes of £5 or higher values.
Clause 1 of the Bill makes two changes of substance in the existing statutory provision. In subsection (5) it gives the right to call in bank-notes, of whatever value they may be, and in subsection (1) the right to issuebank-notes of any denomination that the Treasury may approve. At present, the position is that the Bank can issue notes of any denomination in excess of £5, but is restricted below £5 to 10s. and £1.
The second change of substance in the law is that the Bill provides that the issue of notes of these denominations shall be subject to the approval of the Treasury—that is, subject ultimately to this House, inasmuch as my right hon. Friend is ultimately responsible to Parliament forthe giving of approval or non-approval for such action. The rest of the Clause consists largely of re-enactment of existing provisions, which are scattered about in a variety of statutes. As a result, Clause 4 (2) contains quite a number of repeals. The effect of this, in substance, is to put into one Clause the general law on the subject and to give freedom both to issue and to call in notes of any value subject to the approval of the Treasury.
Clause 2 deals with the distinct subject of the fiduciary issue, which is the field covered by the other Defence Finance Regulation to which I referred. The latest statutory provision on this subject fixes the maximum of the fiduciary issue—that is, the issue of notes permitted over and above notes which arecovered by such gold as may be in the Issue Department of the Bank of England—at £300 million. That is under the Act of 1939.
As hon. Members will be well aware, that figure is completely out of line with the current position. As indicated in an answer which my right hon. Friend the Chancellor gave to my hon. and gallant

Friend the Member for Romford (Lieut.-Colonel Lockwood) yesterday, the fiduciary issue today stands at £1,625 million, and the legal foundation for the fiduciary issue being at that level, as opposed to the £300 million fixed by the 1939 Act, is Defence Finance Regulation 7AA. which, as I have already indicated, it is the purpose of the Bill to dispense with. Hon. Members will agree that it is unsatisfactory that this matter should be regulated on a statutory basis which is completely out of date, modified by the use of emergency powers, and I am sure the House will agree with me that the matter ought to be put on a normal and regular statutory basis
Perhaps I might make one general comment on the effect of the Clause before mentioning one or two of the details. At one time very great importance was attached, both in the House and outside, to the size of the fiduciary issue, and it was fairly widely thought that by limiting it in one way or another one could control inflationary pressures or inflationary developments. Today it is fairly generally realised that the size of the fiduciary issue has very little to do with the general broad questions of inflation or deflation.
I should be going outside, as I understand it, the confines of the Bill if I were to go very far into these issues, but perhaps I might be allowed to remind the House that the real inflationary pressure develops, if it does develop, not from the printing of bank-notes but from the creation of credit, and that in any event the main vehicle for payments, and payments of large amounts, is, of course, the cheque or other document of that sort, and not the bank-note. The purpose of the bank-note is simply to enable people to cash their cheques, and it is certainly not a conceivable way of restraining inflation to make it impossible for people to cash the cheques that they present. The main function of the fiduciary issue today is, as I see it, to ensure that sufficient notes are available for the practical convenience of the public.
It is, of course, a fact also that the significance of the size of the fiduciary issue is rather less today than it was immediately before the war. The right hon. Gentleman the Member for


Battersea, North (Mr. Jay) will recall that before the war the main gold reserves of the Bank were kept in the Issue Department, and notes over and above those authorised for the fiduciary issue were also issued against that gold. Consequently if the Bank lost gold but the demand for notes remained constant, it was necessary to increase the fiduciary issue to make up the shortage. In those circumstances, therefore, it was on occasion a fact that increases in the fiduciary issue indicated a loss of gold by the Bank.
But since 1939 the gold reserves of the Bank have not been kept in the Issue Department, except to a very trifling extent. The main reserves have been kept in the Exchange Equalisation Account, and, therefore, gold movements have not affected in any degree that one could possibly ascertain the size of the fiduciary issue. Consequently, variation in the fiduciary issue has lost the significance which up to the war it had as a kind of barometer of what was happening to the movement of gold.
The Bill proposes in Clause 2 to fix the basis of the fiduciary issue, from which one moves in subsequent subsections, at £1,575 million. That figure was selected because it was the level at which the fiduciary issue stood at the date of the Bill's introduction. As I have already mentioned, the present figure is £1,625 million. As the House will be aware, that is a usual movement at this time of year. There is an increased demand for notes during the pre-Christmas period for obvious and, indeed, for very human reasons, a movement which takes place every year. As at present advised, I see no reason for altering the base figure which stands in the Bill, although we may look at it again during the Committee stage.

Mr. Norman Smith: Hear, hear.

Mr. Boyd-Carpenter: I am glad that I carry the hon. Gentleman with me on that point. It is always agreeable to find such a meeting of minds.
The House will note that Clause 2 provides that the Treasury shall have power to make increases above this figure for periods of six months or less but that the

Bill is not to be continued for more than two years without the making of an order which shall be effected by Statutory Instrument and laid before the House as a Statutory Instrument. This follows, broadly, the procedure laid down in the Currency and Bank Notes Act, 1928, under which, by Treasury Minute, increases could be authorised for six-monthly periods, but if the periods ran in the aggregate more than two years, further Parliamentary action was required.

Mr. Douglas Jay: There is an important difference between the provision here and the provision in the 1928 Act. If I am correct, it was not merely an order but additional legislation which would be required.

Mr. Boyd-Carpenter: I deliberately did not phrase precisely what I said, because the Statute is not clear. The wording is, "unless Parliament otherwise determines." I should think it probably would involve legislation, but it is a rather difficult question of construction on which I should not like to be dogmatic, and that is why I used the expression which I did.

Mr. Jay: Would it be possible for one of the Law Officers of the Crown to advise us on this point before we give the Bill a Second Reading today?

Mr. Boyd-Carpenter: I do not know whether that is a matter for any of the Law Officers of the Crown. It might be more a matter of Parliamentary procedure than of strict law. If any point of substance arises on it—it is more a matter for the Committee stage than for the Second Reading—I will certainly seek advice. My own opinion, for what it is worth, substantially inclines towards that of the right hon. Gentleman, that it probably means legislation, but it is a rather curiously obscure expression, as I am sure the right hon. Gentleman will agree.

Mr. G. R. Mitchison: If the hon. Gentleman is not going to deal any further with that point, Mr. Speaker, perhaps you will allow me now to raise a question of Privilege under Clause 2.
As the hon. Gentleman has just explained, there is in Clause 2 a provision for extending by order over two years the power to affect the volume of the fiduciary issue. The order is made subject to annulment in pursuance of a Resolution of


either House of Parliament. The hon. Gentleman will no doubt agree that that point is a new one.
The question I wish to raise is whether it is right, having regard to the privileges of this House, that the other place alone, by Resolution, should be able to procurean alteration in the amount of the fiduciary issue or the length of time affecting the issue. Of course, if this were purely a domestic matter of the Bank of England I should have little to say, but under Section 6 of the 1928 Act there is a provision that the profits of the note issue—and that includes, as I understand it, this very matter—are to be paid to the Treasury. Indeed, the provision goes on to say that:
For the purposes of the Income Tax Acts, any income of, or attributable to, the issue department shall be deemed to be income of the Exchequer, and any expenses of, or attributable to, the issue department shall be deemed not to be expenses of the Bank.
My respectful submission on the matter, Mr. Speaker, is that in those circumstances the Treasury, acting in this matter by their statutory agent as it were, the Bank of England, are entitled to take—indeed are bound to take—all the proceeds of the fiduciary issue and, of course, to apply in aid of Her Majesty's needs; and that it is therefore so closely analogous to a matter of supply that it ought not to be capable of being affected one way or the other by a Resolution coming solely from the other place.

Mr. Speaker: I think the hon. and learned Gentleman is referring to Clause 2 (8)?

Mr. Mitchison: Yes, Sir.

Mr. Speaker: There is no question of Privilege in that. So far we have before us only the draft of a Bill which can be amended by this House, and it is entirely in the hands of the House. Whilst the argument advanced by the hon. and learned Gentleman may be a good argument for deleting this provision allowing the other place to pass a Resolution annulling an order affecting our finance, whether the House accepts it and deletes the words, or rejects it and leaves thewords in, the House is not offending against its own privileges, because it cannot do so. There is no question of Privilege here.

Mr. Mitchison: If I may pursue the point a stage further, Mr. Speaker, may I ask your direction on this matter: would there be any question of a waiver of Privilege if we had to consider this subsection?

Mr. Speaker: No, there is no question of a waiver of Privilege in so far as there is no question of Privilege in it. Accepting the argument of the hon. and learned Gentleman for the purpose of what I am about to say, if the House did leave those words in, the House would to that extent have waived the Privilege which the hon. and learned Gentleman says exists. But there is merely a proposal before us now, and it is for the House to decide. There is no attempt by anyone else to influence the House or to force upon the House a course repugnant to its privileges.

Mr. Leslie Hale: Further to that point, Mr. Speaker. The House is in difficulty in this matter because the practice always has been to print in italics for the benefit and guidance of hon. Members, those Clauses of a Bill before the House which involve financial matters for the jurisdiction of the House, so as to warn another place that there are matters which involve Privilege and which are being reserved because they are regarded as involving Privilege.
Here is a matter of great importance which clearly affects the financial stability of the country. It is a matter which gives the Treasury power, notwithstanding the provisions of the Bill, to issue ad hoc directions increasing the total amount of currency available. If one assumes for a moment that the Treasury, without a valid reason, gives another place power on Resolution to annul that, in certain circumstances it would provoke an obvious crisis because, quite apart from anything else, the steps would have been taken in pursuance of the Minute before the annulment. Is not the House entitled to know at this stage whether, in discussing the matter at this moment, in discussing it as part of the Privilege of the House of Commons, it will be printed in italics when the Bill is before another place and will not be a matter for another place?

Mr. Speaker: There is no question of Privilege in this. The hon. Gentleman and the hon. and learned Gentleman can


secure any object which they have in mind by putting down an Amendment to the Bill in Committee to excise any reference to the other place, but it is purely a question for the House to decide. There is no question of Privilege in this.

Mr. Eric Fletcher: I do not wish to pursue this matter unduly, Mr. Speaker, but will you be good enough, at any rate before this matter reaches the Committee stage, to consider whether or not this Clause should not have been printed in italics? I agree with what my hon. Friend the Member for Oldham, West (Mr. Hale) says, that the House is in a real difficulty. It appears that this Clause will confer on another place powers in regard to revenue and supply which they do not have at the present moment. This point has been raised for the first time and I think the House would be grateful, Mr. Speaker, if you would take an opportunity of considering whether, when this Bill comes to be printed and therefore before it goes to another place, this paragraph should be printed in italics.

Mr. Speaker: It seems to me that there is a little misconception about this matter. As far as my knowledge goes, if passages in a House of Commons Bill are printed in italics that indicates that they are dependent upon the passing of a Money Resolution by a Committee of the whole House. There is nothing in the printing point, and if hon. Members wish to pursue it further, it is purely a Committee point for the House itself.

Mr. Boyd-Carpenter: As I understand it, this is an interesting issue which we can pursue in Committee on its merits. When we come to do so, I think I shall be able to satisfy hon. Members that there are not only satisfactory precedents but satisfactory arguments of principle for dealing with this matter in this way. However, I do not want to anticipate that discussion, which in many ways would be unfair.
Subject to that point, the procedure which I have indicated is, of course, necessary in order to vary the size of the note issue, not least because of those changes in seasonal demand which occur at Christmas and during every holiday

season. It is desirable that there should be some flexibility in the regulation of the exact size of the note issue, but it is equally right that, if the matter passes beyond the realms of temporary flexibility, and if the general level looks like settling down at a somewhat different one from that laid down in the Bill, then Parliament should have an opportunity of considering it, though, as I have indicated, in my own view—and this is to some extent a matter of opinion—the exact size of the fiduciary issue is not as fundamental to our national finances as used to be believed some years ago.
That is Clause 2. Apart from the interpretation and repeal Clauses, Clauses 3 and 4, the latter of which revokes the two Finance Defence Regulations to which I have referred, that is the whole of the Bill.

Captain J. A. L. Duncan: Before my hon. Friend sits down, can he give an assurance that there is no intention in this Bill to interfere with the existing rights of the Scottish banks to issue their own notes?

Mr. Boyd-Carpenter: I can give that assurance, and my hon. and gallant Friend will no doubt have observed in his study of the Bill that the provisions with respect to legal tender of certain notes do not apply to Scotland.

Mr. Raymond Gower: Can my hon. Friend tell the House, for its guidance, in what respect this Bill will vary the practice which has been followed hitherto, and to what extent?

Mr. Boyd-Carpenter: I do not think that I can answer my Friend's question without repeating the speech which I have just made, and even to please him I should hesitate to inflict it again on the whole House. Broadly, changes of substance are the greater freedom in the choice below £5 of the value at which notes may be issued, the removal of the gap which had to be closed by Defence Regulations in respect of notes which should be called in, and certain minor modifications. The main purpose is to re-enact in one Bill quite a number of provisions.

Mr. Speaker: Before I call the hon. Member for Nottingham, South (Mr. Norman Smith) to speak, I have to tell


him that I am not selecting the Amendment in his name,
That this House declines to give a Second Reading to a Bill which impedes the adoption of a Socialist currency policy and which, through facilitating the demonetisation of legal tender currency, widens the scope of capitalist money lending while giving the House of Lords new powers over finance.
I am not doing so because it might tend to narrow the debate unduly. There may be other reasons against the Bill which have escaped even the comprehensive category which the hon. Member has put down. Everything that thehon. Member says in his Amendment is relevant on Second Reading.

4.11 p.m.

Mr. Norman Smith: I am very grateful to you, Mr. Speaker, not only for your kindness in giving me an explanation of why you are not calling my Amendment, but also for the carte blanche you appear to have given, not only to me but to other hon. Members, on the Second Reading of a Bill to which the Financial Secretary either does not attach, or wants the House to believe that he does not attach, much importance. The latter is the more probable. I have no doubt that the Government attach the utmost importance to this Bill. Indeed, the point of Privilege which was raised by my hon. and learned Friend the Member for Kettering (Mr. Milchison) is, from our point of viewand no doubt from the point of view of any hon. Member, a matter of the utmost importance.
But I see in this Bill other real dangers which have to be exposed and fought by a party which claims to speak for the mass of ordinary people in the country, as distinct from the comparatively few people in London and elsewhere who are concerned with the money market. The Financial Secretary spoke with the utmost complacency about inflation. My mind went back to the days when the hon. Gentleman was in opposition. If my right hon. Friend the Member for Battersea, North (Mr. Jay) had been occupying that position and had in fact introduced this very Bill, the opposition from the hon. Gentleman who is now Financial Secretary would have been formidable and even ferocious.
The Financial Secretary referred to inflation. It is, of course, very convenient

to have a fiduciary issue of £1,575 million instead of £1,400 million. Only a year ago last February the predecessor of this Bill was printed and circulated to the House. I happen to have taken the precaution to bring with me last year's Bill for comparison with this year's, because there are differences in which the House will be interested.
I and my hon. Friends do not share the complacency about the subject of inflation which the Financial Secretary, with, I thought, a certain amount of levity, displayed in this House. It is a peculiar coincidence that we should have the Second Reading of this Bill the very morning after certain announcements were made which conveyed to the public the important fact that not only must the fiduciary note issue be increased over and above what is provided in this Bill but also that the other form of currency, which the Financial Secretary was good enough to make quite clear was the really important form of currency, namely, the bank deposits, which circulate money from one account to another by cheque, had gone up by 3½ per cent. in the period since Her Majesty's Government had been in office.
That is a very considerable increase, having regard also to the fact that the note issue now in circulation to the public—I am not talking now about the fiduciary issue—has gone up by 12½ per cent. since the party opposite came into office. I am certain that if my party had been on the benches opposite and my right hon. Friend the Member for Battersea, North had been introducing this Bill, there would have been a furious onslaught on us, with the allegation of inflation.
I do not deny that there is inflation. Itis the Socialist creed that one cannot work a capitalist system without inflation. There has been inflation in America ever since 1945, with the exception of a brief interval in 1949 when the Americans tried to cut down their national debt and they had four million unemployed, and the late Sir Stafford Cripps was forced by economic repercussions to devalue the £. The present Financial Secretary talks about inflation light-heartedly in office, but he used it as a battering ram against his opponents when he was in opposition.
This inflation is a serious thing, and it is a serious thing to have to increase


the fiduciary issue. If there is more money in circulation then, unless production goes up proportionately, obviously prices must rise. It makes nonsense of the Welfare State, the essence of which is to provide fixed monetary benefits in times of stress. When one has inflation and the value of the monetary benefit become less, the Welfare State is prejudiced. It is our case that under the existing financial system, which the Financial Secretary upholds and in which he heartily believes, we are bound to have inflation. I can foresee the day when, if I live long enough, I shall see another Bill brought in to provide for a much larger issue of fiduciary bank notes.
This Bill does not stand up. It is a very bad Bill from start to finish. Even its Title is not a good Title. "Currency and Bank Notes Bill"—the Title is tautological, and nonsense. The hon. Member for Edinburgh, South (Sir W. Darling), who is in his place, is very particular about the use of the English language and he will appreciate that to say "currency and bank notes" is tautological. If I were back in my old business in Fleet Street and I proposed to issue a magazine to circulate among dog lovers, how ridiculous it would be if I proposed to call it "Dogs and Dalmatians" or, if I proposed to issue a magazine dealing with my wife's hobby of gardening, I called it "Flowers and Carnations." People might well think that there was something wrong with me, and surely there is something the matter with people who perpetrate this Title "Currency and Bank Notes Bill."
The currency which we use is mostly of another character altogether than bank notes. There are, of course, bank notes and coins, but most of the currency consists of bank deposits which circulate by cheque from one account to another. So far as I can see it, it is the settled policy of Her Majesty's Government and the hidden purpose of this Bill to enable those deposits to increase without inflation. That accounts for Clause 1 (5) of the Bill.
If anybody wants to understand how important bank notes are in the whole scheme of things, I would draw the attention of the House to the dimensions of the tripartite currency which we have in

this country. There are £169 million of coins according to the "Monthly Digest," and that is not very much. There are now circulated among the public some £1,400 million or £1,500 million of bank notes, and there are some £6,000 million deposits. I estimate the deposits to be 16s. in the £ of our currency; I estimate the bank notes to be about 3s. 8d., and the coins the remaining 4d.
This Bill is concerned with the comparatively unimportant aspect of our currency—the bank notes. It has profound repercussions, as I hope to show, upon the banking deposits, which are the most important part of the currency. I am sure that the House cannot but agree with me that this Title is tautological and ought to be amended in Committee. I hope that someone will think of a better Title. Why not simply "Bank Notes Bill"?
I should like the Financial Secretary to give us an explanation on another point. I wonder how it is that since February of last year, when the first Currency and Bank Notes Bill was before us, which was not debated and so was not passed by this House, there has been a remarkable change. There was a lengthy Explanatory Memorandum on the front page of that Bill; it was 4½ inches long. As soon as I picked up the present Bill, the 1953 edition, or vintage, I found that the Explanatory Memorandum had been shortened to 2½ inches, a pretty substantial cut of 45 per cent. One wonders why.
Having studied the two versions rather carefully, I came to the conclusion that the 1952 Explanatory Memorandum gave too much away. It made it clear, even to dull persons like myself, that the purpose of Clause 1 was to provide for the calling in and demonetisation of the overwhelming part of the note issue, namely, the£1 and 10s. notes, which are no less than 82½ per cent. of the total note issue. We cannot demonetise them until the Bill is passed—if it is passed, which I rather doubt. The Explanatory Memorandum to the old Bill made that very cleareven to people like myself, and the present one does not make it clear at all. It merely says that Clause 1 deals with the issue and calling-in of all bank notes. This is very much more comprehensive and very much less likely to arouse the suspicions of people like


myself who expect—after all, it is 47 years since I was a Tory—that there is a catch in anything that the Conservative Party does.
Then I noted—the Financial Secretary did not refer to this point—that what used to be Clause 1 (6) has been dropped. It has disappeared. It is sunk without trace. It does not appear at all in the new version of the Bill. I would remind the House of what it was 18 months ago:
Notwithstanding anything in the Truck Acts 1831–1940, payment of wages in bank notes of any denomination which are for the time being legal tender shall be valid.
That subsection has been dropped, and I do not know why. I rather wonder whether the Government have any tricks up their sleeve with regard to the payment of wages by cheque. I usually find a cheque very useful.
That reminds me that I had a letter the other day from a young constituent who is a miner. He came to this House a few years ago as a boy leaving school, and asked my advice as to his career. He wanted to go into the mines. I said, "Go into the mines, but take jolly good care that at the same time you study the technical side and go to evening classes." He has taken my advice and he has got a much better job, in consequence of which he is now told by the National Coal Board that he must have a banking account. He asked me whether I would sponsor him, and of course I gladly did. I cannot help thinking that there may be something underhand in this omission. As it eludes even my vigilance I shall not pursue that point any further.
I turn to Clause 1 (4) which really must have something added to it. It says:
The holder of bank notes of any denominations shall be entitled…
to do certain things. He can go to the Bank of England and receive in exchange for his bank notes
bank notes of such lower denominations, being bank notes which for the time being are legal tender.
That is all very fine. I suppose it means that if I have a bank note for £1 and go to the Bank of England, it undertakes to give me two 10s. notes for it. After all, there are a lot of 10s. notes. They amount altogether to £89 million, which means that there are nearly 200 million 10s. notes. The subsection does not say

what you have to do with a 10s. note. That should be explained.
The next subsection is where the Bill really is not laughable, and where it begins to give a rough idea of what we get for our 10s. note. It is the real and operative subsection. Here we come up to the potentialities of mischief which are inherent in the Bill. The subsection gives us some sort of idea how to get rid of our 10s. note. It introduces something new. Remember that we are dealing with 82½ per cent. of the note issue, which is a pretty large proportion. Here is something new, something significant, indeed portentous, of what could happen. These notes can be called in and cease to be legal tender. They cannot be called in merely by a wave of the hand. The Bank of England has to go through a certain ritual, and has to give consideration for the bank notes that it calls in. The consideration is payment of the face value of the note.
That becomes very interesting. This is where I begin to sniff and to come on the trail of the real intentions behind the Bill. Let me refer to the 1928 Act, and to the corresponding Clause in that Measure. I did not take part in the Second Reading of that Bill, but I listened to it, though not from these benches. I listened from the Press Gallery. That Clause simply said that the Bank of England could exchange one lot of notes for the other. Here is a change. Now the Bank of England is to get hold of the notes and pay their face value. Thereafter, it can destroy the notes.
It is a neat little conspiracy, having regard to the relationship between the Conservative Party and the City of London—one of the neatest little conspiracies I have come across for quite a long time. [An Hon. Member: "Why?"] The Bank of England undertakes to pay the face value of these notes. There is only one method for it. If it pays the face value of the notes which it calls in, including the 10s. notes, it will have to give a consideration. Suppose it is to the Midland Bank. The Bank of England will have to give to the Midland Bank a draft on its own banking department. When notes from the issue department of the Bank of England come in, Government securities to the same amount go out of the issue department to the banking department, where the Bank of England uses


them as cover for its draft to the Midland Bank to pay for the notes. So far, there is no change.
The Midland Bank, having parted with these notes and having got in place of them a Bank of England draft, which is quite simply, from the point of view of the Midland Bank, cash at the Bank of England, finds its ratio is unaffected according to the formula used now. This is a different formula from the one used in these matters 20 years ago, immediately after the First World War. In those days, immediately notes were called in, the Midland Bank would have to tighten up on its advances. The formula was a simple one: total deposits were a straight forward function of the cash it had, which was interpreted to include cash at the Bank of England as well as notes or coin.
I am certain that the Conservative Party do not bring in a Bill like this to achieve the status quo. I am certain that when the Bank of England has called in these notes it will proceed to sell Government securities from its banking department and call in the draft from the Midland Bank. It must do that, or nothing happens. Then the Midland Bank will be in the very happy position of having got rid of some of its cash, represented by notes and/or a draft at the Bank of England—it does not matter which—and then it will be able to increase lucratively its money market assets.
The formula for the stability of these commercial banks is that the proportion of their total deposits represented by cash—which is interpreted to mean coins and notes, plus balances at the Bank of England, plus money market assets—shall not fall below a certain figure, which is of the order of 30 per cent. I can only suppose that this Clause has been designed deliberately to enable the commercial banks, the clearing banks, to hold less in the way of either bank notes or Bank of England drafts and more in the way of money market assets.
It is the deliberate policy of the Conservative Party to encourage that peculiar form of activity known as the London Money Market, which always seems to me to be parasitical in its nature. It may play some useful part in connection with foreign bills, but it does not need the clearing banks to take any part in

that. This Bill, which enables the clearing banks to increase business which is profitable to them, at the same time decreases the amount of bank-notes circulating which could be, if the Government liked, profitable to the Government. But I notice this. There is no intention whatever of the Bank of England competing with the commercial banks in ordinary banking business, because the Bank of England Act, 1946, provided in Section 1 (4) that a certain amount of money—I think £873,000 odd—should be handed out of its profits to the Treasury twice a year.
The business of bank-notes can be so profitable that, as my hon. and learned Friend the Member for Kettering (Mr. Mitchison) said when he raised a point of Privilege earlier this afternoon, under the Bank of England Act, 1946, the Bank of England has got to pay £873,000-odd every half year into the Treasury. But if the note issue were greater, the Bank of England would presumably have more profits on the note issue. There must be some profit in the note issue because the Currency and Bank Notes Act, 1928, provides in Section 6 that the profits of the note issue should accrue to the Treasury and not to the Bank of England.
This Bill is going to make certain that the nationalised bank, which belongs to the public, shall not do too much lucrative business in bank-notes. It says: "Thus far shalt though go, by £870,000-odd twice a year, and no further." I notice even in the latest return of the Bank of England, which was issued this year, covering the period ending February, 1953, that that payment of £873,180 was made twice during the period under review. So we evidently have a state of affairs in which the nationalised Bank of England is not to indulge in any profit making. If there is to be any profit making, then it has got to be done by the clearing banks which are still privately owned.
The operation of Clause 1 (5) of this Bill will help the clearing banks by decreasing their holding of either bank notes or bank cash which, if profitable at all, is profitable to the nationalised institutions, and will enable them to preserve the numerator of their fraction intact and not alter the original denominator of their fraction by increasing their money market assets, and to go still more


deeply into what I regard as the questionable business of lending somebody else's money on short-term in the City of London.
Obviously, in that market nobody is going to lend his own money, unless it is money which he has created out of nothing, in which case he is in a privileged position. That is the sinister purpose which is achieved by the Tory Party. It reminds me of a poem entitled "Plain Language from Truthful James" of which I used to be fond when I was a boy at school but which I have not seen for many years. Looking at the Financial Secretary, I see that this poem is certainly applicable to him. It starts off in this way:
Which I wish to remark,
And my language is plain,
That for ways that are dark,
And for tricks that are vain,
The heathen Chinee is peculiar,
Which the same I would rise to explain.
If we delete the heathen Chinee and substitute the Conservative Government, we get an exact description of the Conservative Government.
There are some more lines which are an exact description of the Financial Secretary, who sometimes laughs and often grins, and when he smiles it is a singularly childlike and bland smile. These lines are:
But he smiled as he sat by the table, With the smile that was childlike and bland.
It goes on to say:
And the same with intent to deceive.
But I shall not pursue that.
The real purpose of this Bill—and if anybody wants evidence, I can give several substantial pieces of evidence—is to carry out the deliberate policy of the Conservative Government to encourage the banks to develop their money market assets. There is, first of all, the growth in the banks' bill business. It has been tremendous. In the years 1936–38 their bill business was of the order of 12 per cent. to 14 per cent. of their total deposits. By 1950 it had risen considerably to 21·6 per cent., and now it is 21·8 per cent., which is an all-time record. It has been somewhat interrupted by the Serial Funding Loan, but it is none the less an all-time record.
While that has been going on the Floating Debt, which is the thing over which the Bank of England has the day-

to-day control if it wants to—and it would want to, if the Treasury said it ought to—in the 12 months covered by this report shows an increase of £121 million in respect of Treasury bills, but Ways and Means Advances by the Bank of England have gone down by £65 million. All this is going on behind the scenes—the lending of non-existent, or rather intangible, money, which is so profitable.
But this sort of business on the part of the nationalised bank, which is our property, is discouraged, and down it goes by £65 million in the last year. On the other hand, if it is to be the Treasury bills which are profitable to private bankers in the City of London, then it is encouraged. It has been up by £121 million in the period covered by the report. Here, I submit, is corroborative evidence that the whole purpose of this Bill is to help the Conservative Party's friends in the City of London at the expense of the nationalised bank.
That brings me to something comparatively unimportant. There is no provision whatever in this Bill for the design of bank-notes. I do not propose to say much about it because I had the privilege of raising it on the Adjournment a few months ago. I wanted a picture of Her Majesty to appear on our bank-notes, as the picture of the reigning Sovereign appears on Canadian, Australian and many colonial bank-notes, and as reigning Sovereigns of other countries appear on those countries' bank-notes. The Financial Secretary pooh-poohed the whole idea. He was not going to interfere, neither was it the policy of the Government to interfere, with the day-to day policy of the Bank of England. They could issue directions under the 1946 Act if they liked, but they will not issue directions, and they will not even lift the telephone and say to the Governor of the Bank "Look, Governor, the people of England would be delighted if the picture of Her Majesty were on these notes."
The reason they will not do it is this. When the Tory party were in opposition they accused us of being doctrinaire. Actually, nobody could be more doctrinaire than they are. The reason they will not do what I want in respect of the design of the notes is simply that it would bring home to everybody in the country that the Bank of England is our bank and


not the Tory Party's bank any longer. They will not do it. I hope that in Committee a move will be made to get that done. If it be not done, I hope that better reasons will be given than those which were given on the Adjournment a few months ago.
I want to refer briefly to what would be my idea of the sort of Currency and Bank Notes Bill that a Labour Government would introduce. It would have to be a Currency and Bank Notes Bill for the very good reason that it would be a very different Bill from this. I suggest to this House, and particularly to my right hon. and hon. Friends, that there is such a thing as a Socialist currency banknote policy which would bring very much benefit to the people of this country. It is based on the principle that the function of the Government is to issue currency and not to borrow it.
Nearly all the circulating currency in the country today is issued by banks and borrowed by Governments. So true is that, that during the last war the Government actually allowed themselves to finance the war very largely by borrowing from the banks money which the banks had not got, but which they obligingly created. They allowed the Government to draw cheques and in return they received Government securities which will bring in interest to the banks for all time.
What the Government ought to have done was to print their own notes with the picture of the then reigning Monarch, His late Majesty King George VI on them, and perhaps a picture of soldiers and sailors and airmen as well. They would have been war-time British notes. The Government could have issued these notes and used them for the same purpose as they used the bank drafts which they borrowed. The banks had not the money, but they let the Government draw cheques which were paid to munition workers and others, and got round the population, and which eventually found their way back to the banks to provide deposits. The real cost to the bankers was initially nothing, but the final cost was the liability of the banks in respect of those deposits which found their way back.
Exactly the same production of munitions would have happened, with neither more nor less inflation—I do not say

that there would have been no inflation—if, instead of giving the interest-bearing paper to the banks, the Government had said, "If you will advance money which does not exist and let us draw cheques on the rows of figures in your books, we will give you Government bank-notes which will cover your deposit liabilities but convey no interest to you in perpetuity." If the Government had issued their own Treasury notes, something like the Treasury notes of 1914, and had put them into circulation, then at the end of the day nothing would have been different except that the country would not now be in debt to the same extent that it is.
It really is fantastic that a country waging war and fighting for its life should pay bankers to create the credit of the nation, because it is the credit of the nation and not that of a few bankers. The financing of the war was fantastically unfair and wrong—unfair to posterity and wrong in ethics. Unfortunately it cannot be entirely put right, the omelette cannot be completely unscrambled. That process resulted in all sorts of little people having their bit of War Loan.
The first item of my financial policy would be to examine the figures to see how much were the Treasury bills in the period, say, from 1938 to 1948. I do not say I would take those years, but they are the years for which Ican get the easiest figures from the Monthly Digest. Treasury Bills increased from £280 million to £744 million. Banking investments increased from £637 million to £1,479 million. Very well, I would give the banks £1,300 million of Treasury notes, because that is the growth during the war of Treasury bills plus bank investments, and I would say to the banks, "Here are £1,300 million Treasury notes to cover your deposits; but from now we just cancel out a sum equal to the increase of interest-bearing paper, Treasury bills and bank investments, during the war." That would not be robbing anybody. It would be restoring some of the position, most of which, unhappily, cannot be restored.
I would begin by allowing currency and bank-note legislation to provide another £1,306 million of bank-notes to be given to the banks, and cancel out the same sum of Treasury bills and bank holdings of Government investment. There is nothing unfair about that. Nobody's


deposits would be in danger. They would be covered by legal tender, non-interest-bearing paper, instead of interest-bearing paper, and there is nothing wrong with that. It would be a sensible piece of Socialist financial policy.
The second item in my Socialist currency and bank-note policy would be more important to posterity than to the present generation. The Financial Secretary referred to inflation. Inflation is essentially inherent in the capitalist system. There is bound to be more inflation in the future than now. It follows automatically that when you have a country whose population is increasing and whose productivity and output increase from year to year, due to the operations of technology, inevitably you must have more money to finance that expanding technological economy. If you do not have more money, inevitably your economy will run into an unending series of depressions, because it stands to reason that you cannot finance increasing output with a fixed quantity of money, never mind whether the money be bank-notes, or deposits, or even coins.
If you are to finance an increasing and expanding economy with the same quantity of money obviously prices will be forced down, and any forcing down of prices will put an end to expanding output and bring depression. It is certain, therefore, that in the years ahead, not only in response to increasing calls by basic industries and services but also to cope with the situation arising from the application of atomic science to industry, inevitably there has to be a large increase in bank deposits, unless we are to have a perpetual depression.
Therefore, a sensible Socialist policy would alter this currency and bank notes legislation in such a way as to say to the commercial banks, "Whatever your deposits are in total, on the day when this Bill becomes law, that total shall be your ceiling. We will allow a small variation of 1 per cent. up or down for the necessary elasticity, but for any increase in deposits which you want to make, over and above that, you must go to the Treasury for publicly-created money. You must go to the Treasury for Government bank notes to cover the increase in deposits which you propose to make to your business customers or your nationalised boards."
That would put an end to the process which has been going on for more than 100 years. Ever since the passing of the Bank Charter Act of 1844, science and invention have almost continuously been expanding the industrial output of the country, and the corresponding bank money necessary to carry it has been forthcoming from the banks. The banks and the people to whom they have lent have in that way become possessed of purchasing power which is no less adventitious than the purchasing power put into circulation by a forger or a coiner.
Every forger or coiner knows that it is a highly profitable business if you can create new purchasing power and put it into circulation for the first time. The banks have been doing this ever since the Peel Act of 1844. A sensible Socialist policy would be to stabilize bank deposits at what they are today, minus the £1,300 million to which I referred just now. It would stabilise bank deposits and it would empower the Bank of England to issue to the clearing banks notes to cover all the necessary additional deposits for their commercial borrowers pound for pound.
In that way we should socialise to a considerable extent the increase in the national wealth over the next few decades arising from the application of science to industry; an increase which is in no way due to private enterprise and will be less and less due to it as the years go on, because the effect of technology is to expand the size of industry and to put it beyond the reach of personal investment.
I wish to say in conclusion that this will have to be done because, if it is not, the capitalist system just will not work. The capitalist system will not work for reasons connected with the monetary circulation. The system is trying to do something which is impossible. It is trying to say that the consumer who pays the final price for the retail article shall pay, not only for the cost of making the retail article, not only for the depreciation of the machines used in making it, but also, through undistributed reserves, for the new machinery which has to be introduced to keep pace with technological changes. The system will not work at all unless currency and bank-notes—currency in the widest sense and


all bank-notes—are socialised in the way I suggest. I hope that the Bill will be fought in this House and in Committee.

4.51 p.m.

Mr. F. J. Erroll: We have all enjoyed the sincere and at times amusing speech of the hon. Member for Nottingham, South (Mr. Norman Smith). In some of the more expansive of his arguments he was indulging in a good deal of shadow-boxing. He was setting up guys which he enjoyed knocking down but which existed only in the realm of his own imagination. I hope that he will forgive me if I do not follow him in the whole range and scope of his argument, especially that dealing with the field of Socialist monetary policy.
I completely disagree with his concluding remarks, as I think that his proposals would lead to a substantial measure of inflation. The capitalist system is not very wrong, for it is working well in this country today and it is indeed improving our financial standing throughout the world.
In studying the Bill, and in considering the interesting remarks of the Financial Secretary, I was somewhat concerned about Clause 2 (2), which says that the fiduciary note issue shall be £1,575 million. The Financial Secretary said that that sum had already been passed by not less than £50 million, and he attributed that largely to the increased note circulation which precedes the Christmas holiday. That may account for part of the increase, but it is fair to say that, disregarding the seasonal fluctuations, the note issue increases fairly steadily year by year at the rate of about £100 million per annum.
I should have thought that it was a mistake to fix the figure at £1,575 million. It is unlikely that we shall ever come back to that figure. We shall be embarking straight away on Statutory Instruments of one kind or another as enumerated in the various subsections. I was glad to hear that my hon. Friend was prepared to reconsider the figure. Perhaps a more satisfactory one can be introduced during the Committee stage.
I was also glad to hear from the Financial Secretary his extraordinarily lucid description of the changed concept of the importance of the amount of money in circulation. I need hardly say that I

am in full agreement with his exposition, since payment by cheque has been so widely adopted in the last quarter of a century. One might almost say that the note issue merely supplements the method of payment by cheque and that were any attempt made to reduce the number of notes in circulation it would simply lead to the signing of more cheques to overcome the physical shortage of money. Whatever might have been said in the past for the theory that one could restrict inflationary tendencies by restricting the note issue, that can no longer apply.
We should consider most carefully those subsections which contain power to make orders, to see what might happen if an annulment of such an order were made in either House. I shall not attempt to discuss the somewhat spurious point of Privilege raised by the hon. and learned Member for Kettering (Mr. Mitchison), because I do not think that it would matter which House annulled an order. But the consequences might be serious. I understand that everything done under an order after it has been laid is legal even though the order may be annulled subsequently. The question of what is legal after the order has been annulled is another and most serious matter. It might well appear that the notes still circulating as a result of an annulled order would no longer be legal tender. Perhaps, to be absolutely right, we should make sure that we do not leave the way open for the House to make nonsense of £200 million or £300 million of note issue.
I used the words, "legal tender." That takes me back to Clause 1 (5) which deals with power to recall notes. It says that on the expiration of a notice notes shall cease to be legal tender. That is obviously a sensible provision, but I hope that it does not mean that notes can no longer be handed in after the expiry date. It is one matter for notes no longer to be legal tender, and therefore no longer to be used in trading or other transactions; but it is another if an executor to an estate discovers an envelope full of notes which might have been left in a desk for 20 years, and finds that they cannot be paid into the Bank of England merely because they are out of date. I hope that the Financial Secretary did not intend to make illegal such small hoards. I should like to have an assurance about that.
I wish to follow the hon. Member for Nottingham, South concerning the bank-notes themselves. I would not care to go as far as he did in suggesting that the profile of the reigning monarch should appear on our notes, because there is sufficient indication of the national character on existing notes. There is a picture of Britannia surmounted by a crown. That emblem is one which is quite worthy of our notes and our national sympathies.
There is one detail about our notes which I was surprised the hon. Gentleman did not mention. It is a matter which has puzzled me for a number of years and it will continue to do so unless an explanation is accorded to me. I hold in my hand a £1 note with the signature of a certain Mr. Beale who is apparently Chief Cashier at the Bank of England. He promises:
…to pay the Bearer on Demand the sum of One Pound.
I wonder exactly what that means. I wantto know what would happen if I went to the Bank of England, asked to see Mr. Beale, handed him the note and asked him to give me £1. What would he do? Presumably he would give me another note—and so on we should go, backwards and forwards, until closing time, and then we might go on after that.
It has surely become something of a fiction to promise to pay the bearer on demand the sum of £1 when the note which I hold is itself the sum of £1. In any revision, I think that consideration might be given to this formula which, although interesting from an historical point of view, is now somewhat archaic. It may be that Mr. Beale could explain to me, if I went to see him, exactly what it does mean.
It is important to have economy in this field of bank-note production as in every other field of Government expenditure, and not to print a fresh issue of notes unnecessarily. On the other hand, the quality and cleanliness of our notes is a most important aspect of our national affairs, and can play quite a substantial part in maintaining the morale of our country. Those who go abroad invariably comment on the dirty and sometimes disgusting state of the notes in other countries, and I hope we shall not only maintain but improve the standard of

cleanliness of our own notes by more frequent issues of fresh notes.
I have referred to a clean note which I have in my hand, but I have another which has suffered severely and ought to be called in. It is one that the bank had to give me today, because it was the best that it had got. Although this note is probably all right for Mr. Beale, I think we ought as far as possible to have as many fresh and clean notes available not only from the banks but also from the post offices.
I am told that in the counting of bank-notes it does not matter a great deal whether they are clean and fresh or whether they are used and dirty, but I suggest that it is quite an important factor to our own population and in the minds of visitors who come to these shores.
There has been an interesting correspondence in "The Times" recently regarding the advisability of issuing notes of other denominations, such as £2, £3 or even £2 10s. notes, and I hope the Parliamentary Secretary will not be led too quickly into providing alternative additional denominations. Again, familiarity is a most important aspect in this whole matter. Confidence in our currency is engendered at all levels by a complete and utter familiarity with the notes that are in issue, and the 10s. and £1 notes are, in my opinion, the right denominations for general use. I have just one criticism to make of the £5 notes.

Mr. Cyril Bence: They are too scarce.

Mr. Erroll: I agree. On the rare occasion when I earn and receive a £5 note I always think it would be better if it were of a smaller size and more in keeping with the other notes. It could then be stuffed more conveniently into one's case, and used more readily and more easily. If there were a bigger issue of £5 notes of a more convenient size, they would be more readily used.
I notice that the Bill, although we might imagine, judging by our debate so far that it deals with paper money, does, of course, refer to coins and bullion. In this connection I should have thought it worth while including a Clause in the classic form starting, "For the avoidance of doubt.…" I suggest that for the avoidance of doubt it would be


advisable to insert a Clause to the effect that sovereigns are still legal tender, because I see from reports in the papers recently that we lost quite an important court case in Italy or Trieste over sovereigns which are being made in some country in Europe to the advantage of the coiner.
The court where the case was tried held that as sovereigns were no longer legal tender in the United Kingdom it could not matter if exact reproductions of sovereigns were made in other countries for whatever purpose the manufacturers had in mind. If for the avoidance of doubt such a Clause as I suggest had been in existence, it would have strengthened our case in that court and preserved the integrity of our currency both at home and overseas.
I have mentioned coins, and I do not want to delay the House more than a moment or two, but I should like to use the opportunity to put in a plea for better, simpler and more pleasing coins in this country. Our copper coins for the most part are dirty, cumbersome, and heavy, and I feel that the time has come when we might have the penny in a smaller and more convenient form and more in line with the coinage of other countries where, for the same purchasing power, their coins are smaller and undoubtedly better produced.
There is some case, too, for the improvement of our silver coinage, which is almost invariably dirty because of the composition of nickel and copper with which it is made. If we could only get a really good, modern nickel coinage, especially as pure silver is out of the question, I think then we would have coinage which would be a fitting parallel to the excellent notes that we have. I always feel it is a shame that our coins should lag so far behind our notes in appearance and in serviceability.
These are the few remarks I wanted to make on this Bill. I do not share the doubts and apprehensions of the hon. Member for Nottingham, South as to the hidden things which are in this Bill, and which were not referred to by the Financial Secretary. I regard this Bill simply as what it is, namely, a straightforward Bill to regularise the issue of currency and bank-notes.

5.6 p.m.

Mr. J. Grimond: I, too, came here this afternoon hoping that the Financial Secretary would tell us what a £ was, but he was silent on that. I can, however, help the hon. Member for Altrincham and Sale (Mr. Erroll) to some extent, because I went so far as to call at the Bank of England not long ago. I said that I wanted to change a note. There was some discussion amongst the various officials, and then I was told the Bank was shut. It may be that that was the normal closing time, but I am afraid that if the hon. Member were to visit Mr. Beale for the purpose of changing a note, he might be told that Mr. Beale was out. I think it is a curious provision in Clause 1 (4), and I hope we shall have some answer to the question which has been put about the 10s. note—what do you get for it?
We all enjoyed the speech of the hon. Member for Nottingham, South (Mr. Norman Smith). There is a good deal of amusement now about "the gloomy science." Some of our funniest men are economists. He mentioned that he would like a Socialist Bank Note Bill, and he also spoke about the design of notes. I hope the hon. Member, when he comes to design notes, will have some, not with the Queen's head on them, but with the head of the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) as a dreadful reminder of Socialist finance.

Mr. Boyd-Carpenter: We could not have a smaller note then.

Mr. Grimond: I am afraid that I cannot agree with the hon. Member that inflation is a vice confined to one sort of Government. It attacks all Governments, and, I understand, is particularly prevalent behind the Iron Curtain. I do not think it is entirely fair to blame the capitalist system for the evil.
Turning to the second Clause of the Bill, I hope we shall have some explanation as to why the fiduciary note issue should be £1,575 million. I hope also that something may be said about the policy of the Bank of England and of the Exchange Equalisation Account in holding gold. There is a small amount of gold held in the Bank totalling some £400,000 or £500,000. Why is that there? Is it intended to allow it to


increase, or is it there merely as a reminder of bygone days?
I do not take such a gloomy view of the character of the Financial Secretary as does the hon. Member for Nottingham, South. I do not think that his bland face so entirely belies his character. There may be hidden motives in the Bill, but I believe he is right in saying that today the important thing to watch is the trend in bank deposits, and that the increase or decrease in the fiduciary issue is rather a symptom of something that has happened than itself a significant economic fact. Nevertheless, it is important that any change inthe issue which reflects a change in the volume of credit, ending with either inflation or deflation taking place, should be brought into the public light at once, and should, if possible, be brought before this House. It may be locking the stable door after the horse has bolted, but we are at least entitled to know that the stable door is open and to hear it flapping.
In Clause 2 of the Bill, the provisions for doing that are not very adequate. There is no reason under this Bill why we should debate the matter as a matter of course. It is quite true that a Treasury Minute must be laid, and it is also true that, if an Order is made, it can be prayed against, but, in a matter of such great importance—because I think that what is happening to our credit and currency system is of great importance—it should be obligatory that the matter should come before the House and be discussed as soon as practicable. It is important because inflation is the classic and the chronic vice of all Governments. They are always taking another swig at the bottle.
In bygone days, we used to tie our currency and credit systems to some commodity like gold, hoping that we might have been able to keep the Government out of the wine cupboard, but that proved unsatisfactory. There have been proposals that we might have a system based on some other commodity or group of commodities, but, on the whole, I do not think that is a practicable possibility at the moment. Therefore, in fact, the Government take responsibility for our credit policy, but, nevertheless, we go on operating this policy with a very makeshift machine. Some part of the machinery dates from the days of the gold standard, some of it was

brought in to meet war-time conditions and some in a conscious effort to manage the currency. We maintain to some extent the view that the central bank should be independent of the Government; that was the view put forward by the Macmillan Commission. Nevertheless, the Bank of England has been nationalised, and it depends very largely on directions given by the Chancellor.
I notice that in Clause 2 (3) the Treasury can only move after representations by the Bank of England, and that, apparently, is again a relic of bygone days, when the Bank of England was a genuinely independant institution. Nominally, the Treasury must receive a request from the Bank of England before it can move to alter the fiduciary issue.
On the question of deposits, which it is generally agreed is much more important, it seems to me that no machinery is set up for telling the House what is happening or enabling it to express any opinion, and I should have thought that today, when we are all committed to some form of management of the currency, that is a grave gap. After all, if we are going to try to run a mixed economy, and that is certainly what is happening for the time being, one of the most essential things in that economy is to try to hold the balance between too deflationary a policy, with the danger of unemployment, and too inflationary a policy, which would ultimately destroy confidence and gravely weaken all the advantages of the Welfare State. I do not think that we have considered how that can be done with anything like enough care.
I wonder very much whether the time has not arrived for a new Macmillan Committee to look into the matter, and particularly into the relation between the banks, the nationalised industries, free enterprise industry and the Government, and to review again the whole situation, as it has been altered by world conditions. I think it is a good moment to do that, because it looks to me as though we are—I may be unwise and rash in saying this—entering upon a period in which, as far as financial policy is concerned, we are settling down into some form of compromise, which may last for some time. A great many industries have been nationalised, and I do not think it is the intention of the Government to de-


nationalise any more. Nor do I think it is the intention of the Labour Party to go forward with a very big programme of nationalisation in the near future. No doubt, we shall gradually and slowly inflate, but I do not think that, if the Government exercise reasonable restraint, we shall be faced with any galloping inflation in the near future.
I would ask the Financial Secretary, therefore, to consider whether it is not time for the appointment of another Committee on the lines of the Macmillan Committee, because I feel that, unless we can hold inflation, unless we can supply industry with the right amount of credit, and unless we can guarantee to the people of this country that the £ will continue to be the most stable currency in the world, which it always has been, we are going to face very grave economic and political poblems.
It is one of the great problems of democracy to try to reconcile the great pressure always being made by different sections always to increase their own share of the cake, and the easiest way to do that and to please everybody is to inflate. We must look at all methods by which that can be avoided, and, in addition to our situation at home, we have to remember the immense importance to this country of the standing of its currency abroad. I hope the suggestion may be considered.

5.17 p.m.

Mr. Cyril Bence: In entering this debate, I want to give an assurance, which I can give more emphatically now than before, about my own position. I have no knowledge at all, or very little, of finance, and I have less now than when I started. Many years before the war, in South Wales, I attended classes on economics and finance, and, at the end of those six years, I recalled the statement of Omar Khayyam about always coming out by the same door. Honestly, after listening to orthodox economists and lecturers on finance, I seemed to come out through hundreds of doors, and, at the end of that course lasting six years and covering economics and finance, these people seemed to me to know less than I did—and I knew nothing—because they could never agree with each other.
When I saw this Bill dealing with the fiduciary issue, I remembered that a lecturer told me many years ago that the word fiduciary comes from the Latin fiducia, which means faith, and, when I read this Bill, I wondered if we were being assured of the faith of the financiers in the people of this country or of the faith of the people of this country in the financiers. As far as I am concerned, if the fiduciary issue was based upon the faith of the people in the financiers, they had better withdraw, because if there is one section of the community in which the people of the country have no faith at all it is that very fraternity.

Mr. Gower: Would the hon. Member admit it is rather significant that people all over the civilised world have for generations had a very great faith in the banking and insurance of this country?

Mr. Bence: I am afraid that historically that is not quite true. In the early part of the 19th Century and in the 18th Century financiers were very suspect indeed. I remember as a boy reading Benjamin Disraeli's "Endymion," in which Disraeli says that anyone living in that period would have shuddered to think what frightful people these financiers were. In the Cromwellian period financiers in the City of London were lending to Charles and to Oliver. I am afraid that financiers have played very complicated parts in international affairs. I believe it is true that, after the French Revolution, French banks shipped from France gold that Napoleon had taken from the Italians and sent it from Paris to London. The London financiers immediately sent it to Blücher to be used against Napoleon, the very chap who had got the money from the Italians. It is not true that financiers have always been highly respected.
I do not think it is true to say, as the hon. Member for Orkney and Shetland (Mr. Grimond) said, that Governments have always indulged in inflation. I think it true that bankers, long before the amalgamations took place, indulged in note printing and in that way debasing the currency of the country. It was due to that inflationary work by the independent, profit-seeking, bankers who ruined millions of pepole in this country and all over the world that Governments had to step in and take some control of


the printing of notes and of credit creation. That is why Governments are increasingly taking an active part in the control of the currency, not only of this country but of other countries.
The hon. Member for Altrincham and Sale (Mr. Erroll) talked about the pound-note and the words "I promise to pay." I have no doubt he knows very well that it dates from the days when the note was just a receipt for gold which had been deposited. He may have got a note in payment for some gold deposited, but if he did not deposit any gold he could not expect to have any gold in exchange for the note. We have all accepted notes and I cannot expect anything back if I have not put a commodity in. I have never supposed that I am entitled to gold or any money in exchange for the pound-note, because it is money itself.
I cannot agree with my hon. Friend the Member for Nottingham, South (Mr. Norman Smith) about the design of the pound note. It is just beyond my comprehension why Paterson, a Scotsman, came here and founded the Bank of England, which showed itself to be an excellent institution, and that after all these years we get such frightful notes from the Bank of England while we can get such beautiful notes from the banks of Scotland. It is really time the House of Commons and the Bank of England had a good look at Scottish notes and tried to emulate their design. I do not know whether John McCormack would like his head put on them, but they are better notes and the paper is of better texture than that of Bank of England notes.

Mr. Grimond: Perhaps, as the Scottish notes are so much better than the English, they might give us 30s. for them.

Mr. Bence: I think the value of the note might go up especially if we had it down here instead of only in use in Scotland.
I am concerned about subsection (8) of Clause 2 of the Bill, which says:
The power to make an order under the last preceding subsection shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
The regulating of the note issue of the Bank of England is a very important matter. I am not prepared to accept the

dictum of the Financial Secretary that the fiduciary issue, or note issue, is of very small importance in the credit structure of this country. I still think it very important. Obviously, the quantity of notes must have a bearing on the credit structure because the notes are the instrument by which people can cash cheques within the credit structure. I can quite see a situation in which this House, or the Treasury, might decide to allow an Order affecting the fiduciary issue one way or the other which might have very important repercussions on the economy of the country. Then the House of Lords, under this Clause, it appears, has powers to annul that Order. I always thought we were determined to prevent the House of Lords, as an institution, having power over monetary matters emanating from this House. But it seems that by that subsection the House of Lords will be given power over a very important element in our economy.
I do not say it is the most important element, because I think the most important elements are engineering, coal mining, transport and agriculture, not financing. The monetary system should be a barometer of what is done in industry. Unfortunately, during my lifetime it has been the other way about. Between wars we never had enough money. When circumstances changed we were waiting for labour and raw materials. It has always been the cart wagging the horse.
I ask the Financial Secretary to give an assurance on what the Clause means. I have not been in the House very long and do not quite follow a lot of these things, but, in the hope of learning something, I should like him to explain. Does it mean that the House of Lords could annul an Order to which this House had agreed?

5.28 p.m.

Sir Edward Boyle: The hon. Member for Dunbartonshire, East (Mr. Bence), in what I thought was a very agreeable speech, had some slightly unkind remarks to make about financiers. I certainly would not want to defend everything done by financiers in this country in the last 200 years, but I would put this point to him. I think financiers have played a larger part in our industrial growth than that for which they have been given credit. To give one example, which has


nothing to do with the Bill, but which I hope I shall be allowed to mention, I would instance the rapid industrial progress made in this country after 1760, during the first period of the Industrial Revolution, which, there is no doubt, benefited this country very much in the long run. It would have been impossible but for the wisdom of financiers of that time who realised that the rate of interest had been too high. One can find examples in history where financiers have not been given full credit for the work they did in enabling industrial progress to go on at a greater pace.
I return to the hon. Member for Nottingham, South (Mr. Norman Smith), who quoted poetry to describe my hon. Friend. Whenever I hear the hon. Member on this subject in one of his fluent speeches, I am reminded of the lines of Tennyson's poem, "The Brook":
For men may come and men may go But I go on for ever.
I wish I could express myself as fluently and easily on financial topics as does the hon. Member. I was interested to hear him say that what he wanted to see was a Socialist currency policy. I would point out to him that we have had a mixed economy in this country for a very long time, and that we are likely to have one for a great deal longer. In fact, I do not think that in my lifetime we shall see any change in that regard, and our financial policy should take that into account.
I thought that the hon. Gentleman laid slightly too much stress on the inflationary effect of a rise in bank deposits. I know this is a controversial matter, but I must say that his remarks reminded me of the Chairman of Lloyds Bank's Annual Statements, or the speeches he makes in another place. I think one can over stress the inflationary effect of a rise in bank deposits when one remembers that the ratio between liquid assets and deposits is by no means a constant one.
I think it possible for bank deposits to rise considerably without the inflationary pressure rising by any considerable amount. I think that happened in this country last year. Bank deposits grew considerably, but it cannot be said, if we look at the level of industrial savings last year, that inflation was

mounting during that period. On the contrary, for the first time since the war we got out of a tendency to inflation.
This is an interesting Bill for the very reason that it strikes most of us as so apparently unimportant. Years ago people would have said that the size of the fiduciary issue was of the first importance. For example, to take quite a recent case, in his autobiography Lord Pethick-Lawrence described the Bill of 1928 and said that the provision that the fiduciary issue should be strictly limited to a definite amount above the gold cover was very deflationary, and undoubtedly accentuated the 1929–32 depression in this country.
I do not think that many of us today would go as far as that. Most of us, I think, would agree—as my hon. Friend said when introducing this Bill—that the size of the fiduciary issue is not really a tremendously important factor from the point of view of inflation or deflation. What I think is true—and I very much agree with what was said by the hon. Member for Orkney and Shetland (Mr. Grimond) on this point—is that whereas inflation cannot be caused by a slight increase in the fiduciary issue, none the less the size of the increase is one possible test of whether or not we are getting into an inflationary situation. It is not an infallible test, because there may be some seasonal or temporary reason why it is desirable that the fiduciary issue should be increased.
If one finds that it has increased, then, obviously, one asks whether that is a sign that our economy is getting into a more inflationary state. I think that important for this reason. Ever since the war we have had a tendency to repressed inflation in this country. As I see it, the likelihood in the years to come is that that tendency—for demand to get just ahead of supply and towards repressed inflation—is likely to be a persistent one.
I am not very frightened of a runaway inflation. It is true that we nearly had one in 1951, but one of the reasons why I am not frightened of it is because I think it will always be associated with a violent shift in terms of trade against us, and that, after all, is a danger signal which our island economy cannot ignore. We must always take steps to meet it whether we want to or not.
Neither am I afraid of a runaway deflation, because there are quite sufficient political pressures to prevent that.

Mr. Roy Jenkins: As this debate is now becoming very academic, does the hon. Gentleman regard the shift of the balance of trade against us as inflationary or deflationary?

Sir E. Boyle: As soon as there is a shift in the balance of trade against us, then, of course, we get rising prices and rising wages. I think that the Minister of Works once said that our 1949 devaluation put a time limit on the wage freeze. A large increase in import costs must in a short time have the effect of putting up wages.
As I see it, the choice before the country in the years ahead will be either of keeping the economy on an even keel or of allowing a tendency for repressed inflation to return, and that is why I agree with the hon. Memberfor Orkney and Shetland that the size of the fiduciary issue is something which we should never forget or neglect.
There is only one other point to which I wish to refer, and that is the question of Clause 2 (8), to which reference has already been made. I thought that my hon. Friend the Member for Altrincham and Sale (Mr. Erroll) was on a good point when he asked what would happen legally if by any chance an order proposing a fiduciary issue was annulled. That is not such a purely hypothetical question, because one can never be sure upon what strategy the hon. Member for Dudley (Mr. Wigg) might suddenly embark.

Mr. Ede: Or the hon. Member for Croydon, East (Sir H. Williams).

Sir E. Boyle: It would be slightly awkward if for some unexpected reason we were to find that there was a threat of the whole note issue, beyond a certain point, not being legal tender after all. That is something which deserves consideration.
I am not terribly impressed by the point about the other place, for this reason. The hon. Member for Dunbartonshire, East said quite fairly that, after all, it is the physical aspect of our national economy which matters most. Nobody, so far as I know, objected on a point of

privilege when the other place tried to limit the operation of the Capital Issues Committee to five years. I am thinking of the occasion when the Borrowing (Controls and Guarantees) Bill was amended in another place so that it could only operate for five years instead of in perpetuity. I cannot think that this subsection is really more important than the question whether we should have a Capital Issues Committee for more than five years. I feel that the hon. Gentleman's point about the greater relative importance of the physical side of our economic life is in effect an answer to this point.
In conclusion, I think that our grandparents would have been surprised had they seen such a thin House of Commons discussing and deciding this subject. It is a sign of how our thinking about economic points has changed inthe last 20 or 30 years. I am sure that that change has been for the better, and it is right that we are ready to attribute less importance to this subject. But do not let us lose interest altogether in the soundness of our currency, because the size of the fiduciary issue may possibly be an important symptom of our economic health. After all, we are an island economy dependent on foreign trade, and we must attach importance, not only to the soundness of our economy of our currency, but also to what our competitors abroad and those with whom we trade think about the position and prospects of the £ sterling.

5.39 p.m.

Mr. Frederick Mulley: We have had an agreeable and thoughtful speech from the hon. Member for Handsworth (Sir E. Boyle). While it is tempting to point out the errors into which people fall when they talk about inflation in general, it is perhaps better that I should join issue with the hon. Gentleman on the more serious point he raised about the position of the House of Lords in regard to this Bill.
I think it wrong to draw the analogy that because the House of Lords was allowed to amend a certain Bill, it is on all fours with the position here. The House of Lords can only substantially amend a Bill if we agree with their Amendment. As I understand the Bill as drafted, it would be in order for the House of Lords to annul the authority


given for an increase in the fiduciary issue.
While I am quite prepared to say that currency and bank-note issues today are of very secondary importance, quite clearly a most serious constitutional issue would arise if the House of Lords stopped the legal authority for such a fiduciary issue. For instance, at Christmas, when there is a very great extra demand for notes, people would be told at the banks: "We cannot honour your cheque because the Government have not authorised the issue of a sufficient number of notes." It would be the old cry about the failure of the bank. For an unrepresentative House to have such a power, whether they used it or not, of interfering with the Government of the day, which is responsible to the House and to the electorate, would be a step back towards 1832 which this House should not let pass without demanding a substantial explanation from the Government.
Regarding the main subject matter of the Bill, a great deal has been made out of very little. My first opinion on reading the Bill was that it would not be in order to have a debate on the general economic policy of the Government arising from this Bill, although that is, apparently, what has ensued. I do not wish to go very far in that direction, but I should say that, today, it is really the budgetary policy of the Government which decides whether or not there shall be inflation. It is not the actual size of the note issue.
It has been too little realised by some of the right hon. and hon. Gentlemen on both sides of the House that there are other non-economic factors which influence the note issue after a given time. The Financial Secretary mentioned the customary seasonal demand at Christmas, and, again, during the war there was an abnormally large issue because families, which normally were together, were divided, with the husband in the Forces perhaps, and the family elsewhere. Therefore, instead of there being a small family reserve held for two or three people, each had to have a separate account. Then, at holiday times, when people are going away from the banks, a greater number

of notes are needed in circulation because they are held by individuals against contingencies. I do not think it is true today to say that the size of the fiduciary issue is really of any importance in determining the Government's economic policy.
We have had some surprising speeches which, from my point of view, certainly do not represent the majority opinion of hon. Members on these benches. They suggested that some kind of Socialist banking policy might emerge, of a character which I am afraid I cannot really determine without a very careful study of tomorrow's copy of the Official Report. It is news to me that this represents a Socialist point of view. The only distinctive point which I could discern from the contributions was that we might have a different design on the notes, which I do not think is necessarily Socialist in outlook.

Mr. John Strachey: It depends on the design.

Mr. Mulley: I think my right hon. Friend will agree that the design was not meant in that direction.
There has been talk of gold and of what happened when a note was presented at the Bank of England, but it must be remembered that it would have been quite impossible to have had the commercial expansion of the 19th Century unless there had been a corresponding increase in the use of cheques in the banking system. We were then, of course, on the gold standard and there was a very rigid fiduciary issue and a very substantial gold reserve in the Issue Department of the Bank.
I think I am right in saying that the Issue Department's holding of gold, bullion and coin today is £2·9 million. In 1939, just before the war, £263 million were taken by the Treasury from the Issue Department, so to suggest that there should be something like the old days, When the in and out flow of gold determined the issue, is impracticable as well as being bad economics. I do not think any one who has recollections of what happened between the wars, and knowing we are no longer the main creditor country, would venture to suggest we should again have a gold standard in this country.
This Bill is very modest and reasonable. Indeed, it has been suggested that the figure of £1,575 million is probably too low. There may be some substance in that argument. Among the reasons why there is an increased demand for notes is that people are nowa little better off and may have more money actually in their pockets. The demand for more notes is often a sign of a better level of prosperity among poorer people. With the trend of events under the present Government I am not sure that there is any reason to suppose that that level of prosperity will continue. Consequently the demand for notes may well decline, and perhaps that is why the Government have come forward with a Bill providing for substantally below the present issue of notes.
If the average working man has some money left on Thursday night, the day before his pay, a larger note circulation is needed than if he is substantially spent up by Monday. As the present economic situation develops he is gradually moving back from Thursday, as it was when we were in office, to Tuesday, and before the Financial Secretary leaves office the working man will be completely "broke" before the weekend. That is an argument counter to those put forward by the hon. Member for Altrincham and Sale (Mr. Erroll), and perhaps explains why the Government have put such a low figure in the Bill. It may be that they foresee this development.
What have the Government in mind in connection with Clause 1 (4)? They appear to have used a new form of words to explain what will happen when a person goes to the Bank of England and demands payment for a note. As my hon. Friend the Member for Nottingham, South (Mr. Norman Smith) said "If you take back a £ note it is easy, you get two ten-shilling notes; but if you present them with a ten-shilling note they will not know what to do." It is purely faith in the stability of the currency that enables the notes to circulate, and it was only a similar kind of faith, no more rational, in gold, that permitted gold coins to circulate. The value of gold was derived almost entirely from its use as money; its secondary uses—gold teeth, for example—would not have been sufficient to have maintained its price, so there is no difference in principle between putting one's faith in a piece of paper or in a gold coin.
I think it may well be time for the rather silly "I promise to pay the Bearer on Demand One Pound" to be removed from the notes. I do not think it would make any difference at all except to the printers. The notes have the legal backing of an Act of Parliament which should be sufficient and this rather stupid promise might very well be taken from the note. I notice that we are having this debate early in the month—perhaps that is why the debate was so arranged. Had it been held a few days earlier there might not have been so many pound notes displayed. There is the question of Bank of England notes being legal tender. As I understand from Section 1 (6), £5 notes and those of higher denominations will become legal tender in England and Wales, but not in Scotland and Northern Ireland, whereas at the present time only £1 and 10s. notes constitute legal tender. I wonder if that is the intention of the Government, and if the Financial Secretary will give the reasons for this decision.
It may be very unwise to allow notes of large denominations to be compulsory legal tender, because even with a £5 note there is considerable suspicion in people's minds. I have not often been the proud owner of a £5 note, but on the few occasions I have had one, although I have not exactly found it difficult to change, I have certainly been looked at rather suspiciously by the person concerned before he accepted the note. I wonder if there is a special reason for making all Bank of England notes legal tender, whether it could be confined to the £5 note, or whether there is even a case for those.
We have had some discussion about dirty and defaced notes. Perhaps the Financial Secretary will tell us—as this Bill is a kind of consolidation Measure—why Section 12 of the 1928 Act, which imposes a penalty for defacing bank notes, has not been brought up to date. The penalty prescribed by that Act is a maximum fine of £1. In view of the expressions we have heard on the desirability of keeping bank-notes clean, it might be desirable for that £1 of 1928 to be brought up to its corresponding purchasing power today. The Financial Secretary may be able to tell us why this provision of the law was overlooked.
My next point is one of principle rather than detail. The Financial Secretary drew attention to the fact that in Clause 1 (1):
The Bank of England may issue bank-notes of such denominations as the Treasury may approve.…
That is a change of the position. While the Financial Secretary was speaking, I thought again of the point of view that Mr. Harrod—the very distinguished Oxford economist—expressed at the time when the Bank of England was nationalised. He was against it being nationalised, not from the usual doctrinaire point of view—because at that time he happened to be a member of the Liberal Party—but because he was afraid that if it were nationalised, instead of the Treasury running the Bank of England, the Bank of England would run the Treasury.
The Financial Secretary is no doubt familiar with the literature about the nationalisation of the Bank of England, because he played same part in the debates in this House on all these topics, but there is some substance in Mr. Harrod's argument. I am not sure that the other considerations do not outweigh that objection, but there is probably some substance in the view that a financial expert of the Bank of England might easily come to the Treasury on all this kind of matter and have an influence which he would not exert if the Bank of England were an entirely separate institution.
We should be told by the Financial Secretary whether this change of position—with regard to the Treasury having to approve the Bank of England demands in the matter of the issue of notes and denominations—is introduced by this Bill in order to defend the Treasury against the unfair influence of the Bank of England. It would be interesting to have his assurance that Mr. Harrod's fears, six years after the event, have proved unfounded, and that the Treasury runs not only the internal financial arrangements of the country but also has control over the Bank of England, and in that way determines financial policy. We shall look forward to the Financial Secretary's reply and, generally speaking, I think he will find that in this matter of clearing up and consolidating the law he has the

support of the majority of Members on this side of the House.

5.55 p.m.

Mr. Raymond Gower: I am sure that we are encouraged by the speech of the hon. Member for Sheffield, Park (Mr. Mulley) because, prior to his speech, we had heard some rather remarkable contributions from his side of the House. It is pleasant to realise that all hon. Members opposite are not captivated by the idea of some strange and new currency to supplement some of their ideas of a different economic system.
Many of us sympathise with the hon. Member for Dunbartonshire, East (Mr. Bence) who described how, in former years, he found it impossible to understand the classical economists because they all tended to differ. Hon. Members on this side of the House have found it just as difficult to follow the Socialist economists in different parts of the world because, just as surely, they also tend to differ.
The real opposition to this Bill—and it was an opposition which was expressed quite forcibly—came from the hon. Member for Nottingham, South (Mr. Norman Smith). He asked the House to reject the Bill because he saw in it a sinister conspiracy to give wealth to the money market. I think that that was his somewhat vivid and highly-coloured description. To him the money market was obviously something extremely involved and strange, something about which had built up a fantastic impression. He reminded us that in earlier years he had had some association with the House as a Lobby correspondent and earlier with Fleet Street. I can well imagine how, in his early days in Fleet Street, seeing the City of London in close proximity, he may have obtained a false impression. Possibly he saw a large car leaving the City and thereby derived the impression of great wealth. It would be just as unjust of me to form such an impression of a great nationalised industryby seeing a large car leaving one of its establishments.

Mr. Mulley: If the hon. Member has any curiosity about the nationalised industries and the salaries paid to their officials, I would remind him that they are public knowledge. That is not the case with the City.

Mr. Gower: I shall not develop that point. The hon. Member for Nottingham, South had a most peculiar impression not only of what he described as the money market but of the joint stock banks. I am one of the few Members of this House whoat an early stage in my life was, for a time, a very humble and obscure member of the staff of one of those banks. I admit that this does not entitle me to speak with authority on matters of banking; but I can say, from my own experience, that I am convinced that those joint stock banks have played a most valuable part and function in the growth of our industry and trade; and they have done much in the past by taking really tremendous risks. I am sure that many of those small people who built up small trades and businesses, particularly in the last century, did so with the help of the small branch banks of Barclay's and the Midland Bank, and so on, with one of which I had some association.
The hon. Member for Nottingham, South was not dealing with that category of banking, however, but with the category which he describes as the money market. Many of us are satisfied that there is no such conspiracy in this Bill. As the Financial Secretary told us, it is merely a straightforward Measure. The hon. Member forSheffield, Park agreed with that view. It is not designed in any peculiar way to add great wealth to any section of the community. Indeed, the powers given by it are limited.
In view of all that has been said, however, I should like the Financial Secretary to say whether he is really satisfied about the amount permitted under the fiduciary issue. Even in describing the fiduciary issue, the hon. Members for Nottingham, South and Dunbartonshire, East were of opinion that that itself was proof of some capitalist conspiracy, as, I think, it was described by one of them. I think the hon. Member for Dunbartonshire, East put his finger on the real meaning of the term when he described how he took a course in economics and found out that the word "fiduciary" had the root meaning of "faith." Indeed, our banking system has been built up on faith.

Mr. Hale: Charity.

Mr. Gower: The hon. Gentleman wants to intervene?

Mr. Hale: I am obliged to the hon. Gentleman. Throughout his speech I have had one doubt. He began by saying he did not understand Socialist economics at all. When he said that he used the pronoun "we." He said. "We on this side of the House are unable to understand." There were only two hon. Members of the party opposite in the House, and the hon. Member himself and the Financial Secretary to the Treasury. In the first place, it seems to me that, as far as the hon. Gentleman is himself concerned, if he does not understand it he should not talk about it. In the second place, if the Financial Secretary does not understand, I think we ought to move the Adjournment of the House until we can have someone in the Government present who does.

Mr. Gower: I was glad I gave way to the hon. Gentleman, because we all enjoy his interventions of that kind.
I would ask my hon. Friend the Financial Secretary whether he is satisfied about the amount mentioned in Clause 2 (2). The hon. Member for Sheffield, Park pointed out that the increase in the requirements at this time of the year might necessitate a very early use of the powers which are contained in the following subsections. Following on that, I should like to say something about the criticism of subsection (8) of that Clause. I am sure my hon. Friend will deal with this point, but I think I am correct in saying that the constitutional limitations on the powers of another place are extremely limited. They are connected, surely, strictly and clearly with taxation and the raising of taxation, and I think it would be a constitutional innovation to say that they are so curtailed as to render it impossible for another place to take any part in any Measure or any aspect of a Measure that could be described as pecuniary in a general sense. Surely the constitutional limitations are exactly limited to questions of taxation.
In Clause 3 there is a certain number of remarks about bank notes. I agree with my hon. Friend the Member for Altrincham and Sale (Mr. Erroll) that the present note does seem to be outmoded. I agree that the definition in Clause 3 refers to a note in the present form, and


if there is any possibility of the notes being amended, then the description in Clause 3 will of necessity need to be amended.

Mr. Emrys Hughes: The hon. Gentleman touched upon the speech of my hon. Friend the Member for Dunbartonshire, East (Mr. Bence) and he has also referred to bank-notes. I should like to know whether he is in favour of having Welsh bank-notes printed in Welsh.

Mr. Gower: That would be an interesting subject for a separate debate, and if the hon. Gentleman attends one of our debates on Welsh matters in particular, he may have an opportunity to intervene. I would ask the Financial Secretary whether he does not think that instead of the words
Bank of England Promise to pay the Bearer on Demand the sum of One Pound
it would be better to have a simple declaration that it is legal tender for £1. The thing is becoming perfectly ridiculous.

Mr. W. R. Williams: On a point of order. Is it not usual to lay on the Table any document from which one quotes?

Mr. Gower: I am sure you will agree, Mr. Deputy-Speaker, that it would be a very expensive proceeding for us to pursue. After all, I am using an exhibit which could be in the possession of hon. Members, and should be. As my hon. Friend the Member for Altrincham and Sale pointed out, it is becoming absurd. I go into the Bank of England to see Mr. Beale.

Mr. Emrys Hughes: Who is he?

Mr. Gower: The Chief Cashier of the establishment. I ask him for £1. He gives me another. Then I go in again and ask for another, and he gives it to me, and so on ad infinitum. It seems that it would be much better to have a simple declaration that the paper is legal tender for £1.

Mr. Ivor Owen Thomas (The Wrekin): Does the hon. Gentleman mean that he just walks in and gets it?

Mr. Gower: Presumably I should need to ask leave to see Mr. Beale, and, as has been pointed out, that would be quite difficult.
Can my hon. Friend say what is the intention in regard to those documents which have ceased to appear and which are known as "tenners"? I know that we on this side of the House are popularly described as having our pockets dripping with "fivers" and dripping with "tenners"; but there was a £10 note, and that, for no reason I can recall, suddenly disappeared. Is it intended that the "tenner,"the £10 note, shall reappear in the future? If so, this definition in the Clause will presumably be altered to cover it.
With regard to coin, which is the third item we find in the Clause, there have been attempts to popularise the idea of a metric system of coinage in this country. I suggest a simple expedient in that connection would be to have 10 pennies to the shilling. We should then have a simple measure as the basis for a metric coinage, 10d. to the shilling and 20s. to the £.
With those few remarks I would say that we should give this Bill a Second Reading. I appreciate that many of these points—

Notice taken that 40 Members were not present;

House counted, and, 40 Members being present—

Mr. Gower: When that occurred, I was saying that we should give this Bill a Second Reading and enable the essential work to proceed.

Mr. William Shepherd: On a point of order. Is it in order for an hon. Gentleman to call a count and then deliberately to walk out, with several other hon. Members?

Mr. Deputy-Speaker: It does not make the least difference.

6.8 p.m.

Mr. James MacColl: I want to depart from this rather complicated discussion we have been having on the theory of money and come down to the more practical question of money, and develop a point that was raised by the hon. Gentleman the Member for Altrincham and Sale (Mr. Erroll) on the quality of the £1 and 10s. notes that are in circulation.
If we are to make permanent by this Bill the Bank of England issue. I think


we ought to get some undertaking or some grounds for believing that we are not going to have as dirty notes as are at present to be found in circulation. I am not in the position that the hon. Gentleman was to take out a note and brandish it before the House. I should not like to do that in the presence of the Financial Secretary; but, as it so happens, I am in the position of many hon. Members of not having a sufficient supply of those articles to be able to produce one.
It is not at all difficult to find in circulation some absolutely deplorable pieces of paper. I thought my hon. Friend the Member for Nottingham, South (Mr. Norman Smith), when he talked so movingly on the subject of the design of £1 notes, was pitying the plumage and forgetting the dying bird, because the important thing is not, it seems to me, what design there is on the note when it is produced but in what condition it is while in circulation and while people are being expected to use it.
It is a little difficult to pinpoint the responsibility for the great deterioration in the state of currency notes, but there was an article in "The Times" on 21st February, which presumably knew what it was talking about, in which it was stated that the joint stock banks, by arrangement with the Bank of England, are increasing the life of £5, £1 and 10s. notes. According to the article, up to the outbreak of the last war the average life of the 10s. note was four months and of the £1 note six months. During the war notes were kept in circulation for longer periods, and by 1944 the life of the 10s. note had risen to 10 months and of the £1 note to 19½ months. Apparently notes are now being kept in circulation for even longer periods than during the war, if I correctly understood the article in "The Times."
It seems to me that even for the poorest, even for the Member of Parliament, who in the ordinary course of events does not have much opportunity of handling currency notes in large numbers, 10s. and £1 notes have to be used at some time. Of all the articles in common circulation, I should have thought that if any were to be reasonably hygienic and presentable it would be the £1 note and the 10s. note. It seems to me absurd to save what cannot be a tremendous amount of money at the expense of the convenience, the com-

fort and even the health of the people. We hear a great deal of talk about the cleaner food campaign, about the importance of washing one's hands after having performed certain very important functions. But we are reaching the stage where one cannot have a meal at a cafeteria and pay for it in advance without retiring to wash one's hands before eating. In those circumstances it is difficult to take the cleaner food campaign seriously.
Nothing could be more deplorable from the point of view of visitors to this country than having the state of our notes as dirty as it is. If it is the ambition of the Financial Secretary, as I imagine it is, that sterling should look the dollar in the face, I think it important that he should first take good care that sterling's face is washed, because the £1 will never have the reputation which it should have if it appears in the debased state of so many notes.
I do not pretend to understand the Bill at all, but I gather from Clause 1 (5) dealing with the calling in of notes that the Bank of England is given power of control in this respect. It is therefore relevant to ask the Financial Secretary to give some undertaking in connection with the policy which, according to "The Times," has been carried out—the quite conscientious and deliberate policy—of extending the life of notes and putting pressure on the joint stock banks to re-issue them instead of leaving the dirty notes to go for pulping and issuing clean notes.
Before we give a Second Reading to the Bill, the Financial Secretary should give some undertaking that the Bank of England will exercise that power in a way which will be consonant with the dignity of our currency, with the convenience of ordinary people who have to use it and also with the preservation of public health. After all, it is a little difficult for people to talk of the importance of cleanliness in other fields when the article which people use most frequently is allowed to get into this disgusting state by the conscientious and deliberate policy carried out, if my information is correct, by the Bank of England. I hope the hon. Gentleman will give some assurance on that point before we give the Bill its Second Reading.

6.16 p.m.

Mr. Eric Fletcher: Before he left his place, leaving the Government Benches even more deserted than they were before, the hon. Member for Barry (Mr. Gower) made some remarks which showed that he has not understood the constitutional position of this Bill. I venture to state it again, because I am convinced that we must have a full explanation from the Financial Secretary of why Clause 2 (8) has been introduced in this way.
The real objection on these benches to this startling innovation is that it gives the House of Lords a power over these matters which it has never had before, and we want to know the reason for that drastic change. Is it part of a concerted policy of the Government to strengthen the powers of the House of Lords over such important matters as the fiduciary issue? The Financial Secretary pointed out that whereas the Treasury had the power from time to time to make temporary increases in the fiduciary issue, which we all concede as reasonable, because they are required for seasonal purposes, under the 1928 Act the Treasury had no power at all to make any permanent increase for a period of more than two years, except with Parliamentary sanction. It is fairly obvious, I think, that that meant by an Act of Parliament, because it is difficult to see what alternative explanation can possibly be given of the words "unless Parliament otherwise determines."
As will be appreciated, under the Parliament Act the powers of the House of Lords are circumscribed. Our objection here does not merely depend on the argument that in respect of Money Bills the House of Lords has no power at all, for the suspensory powers of the House of Lords are very seriously limited as a result of the operation of the Parliament Act.
It was thought preferable in 1928 to restrict the powers of the Treasury in the way I have described. We all recognise that it is very desirable that the Government should take this opportunity of putting an end to the Defence Regulations and making permanent provisions in statutory form for this very important matter of the fiduciary issue, but the Government have departed from the provisions of the 1928 Act and are proposing

that any orders made by the Treasury extending the fiduciary issue for more than two years—that is, whether it is increased or reduced; if it is changed from the statutory figure for a period of more than two years—can be annulled by the House of Lords.
I should like to know what is the purpose of that provision. After the Treasury have made an order varying the statutory limit of the fiduciary issue for a period of more than two years, is it intended that the House of Lords should have the power, by a mere Resolution, to put an end to that change in the fiduciary issue? The consequences of any such Resolution would obviously be very serious for the whole economy of the country and for our monetary arrangements. Such a Resolution might lead to almost catastrophic consequences. Either it is intended seriously to give the House of Lords that power or it is not. If it is intended to give the House of Lords that power, the Government should tell us so and should justify it; whereas if it is not intended to give the House of Lords that power, the Government should not insert a Clause to that effect in the Bill.
You, Mr. Speaker, will appreciate this, because this is the first time that the Government have sought to strengthen the powers of the other place by provisions of this kind. I do not know whether there is any subtle or sinister motive behind it or not, but we are all aware that it very rarely happens that the other place exercise their theoretical powers of praying against Statutory Instruments. I have often wondered what would happen if they did so. It is a power rarely or ever used, in my experience, and, I think, wisely, because it would produce very startling constitutional results if the other place were to begin passing Prayers contrary to the wishes of this House to set aside Statutory Instruments which had the approval of this House.
Therefore, I feel that this is a matter which quite justifiably gives us very considerable anxiety and alarm when we find it introduced in this Bill in this place. I feel, as many of my hon. Friends feel, that we ought not to give a Second Reading to the Bill without a full explanation from the Financial Secretary about this particular Clause.

6.22 p.m.

Mr. Douglas Jay: My hon. Friend the Member for Nottingham, South (Mr. Norman Smith) is a man who thinks for himself. He has done so to very good purpose this afternoon. I do not myself believe that—although the Financial Secretary may have evil designs—his cunning is quite as deep as my hon. Friend suggested or, indeed, that his knowledge of these matters is so profound as that of my hon. Friend.
Nevertheless, I agree with my hon. Friend the Member for Islington, East (Mr. E. Fletcher), as well as with the hon. Member for Nottingham, South, that the Financial Secretary really has to explain why his power to maintain an increase in the fiduciary issue beyond two years should be, in the words of Clause 2 (8) which has been quoted,
subject to annulment in pursuance of a resolution of either House of Parliament.
That, as I understand it, would clearly enable the House of Lords to veto such an increase in the fiduciary issue, even though the House of Commons had approved it. It would indeed be even more serious than the hon. Member for Altrincham and Sale (Mr. Erroll) suggested. It would mean, in principle anyway, that if there were in the House of Lords a majority hostile to the Government of the day, then that House could in fact take over control of financial and economic policy and frustrate the whole economic policy of the Government.
It has been said quite truly today that inflation of the note issue does not nowadays initiate inflation, but that it is expansion of bank credit that matters. But it remains true that expansion begun by the way of bank credit could not continue unless sufficient bank-notes were made available. One could imagine a situation in which it would become impossible to pay wages because there were not sufficient notes available to the banks. What this Bill does in substanceis to give the Treasury and the Bank power to issue £1,575 million of notes uncovered by gold, and a larger amount beyond that for two years with the approval of the Treasury and more than two years subject to this negative Resolution in either House of Parliament.
The issue of bank-notes uncovered by gold has always been thought important, first, because it is one of the things which

can lead to inflation, and secondly, because it gives to the issuer of the notes a fortuitous profit. Therefore, for more than a century this power has been made subject to Parliamentary control. The profit on the fiduciary issue has always accrued to the Treasury. Perhaps the Financial Secretary would confirm that that is still the case, and that that profit appears in the Miscellaneous Revenue in the Budget each year.
It was as long ago as the Bank of England Act, 1844, that the fiduciary issue was first regulated by Parliament. That Act, strangely enough, fixed the fiduciary issue at only £14 million; andit is certainly a reflection of changes since then that £14 million in 1844 has grown to £1,575 million which we are considering today. At that time, I understand that there was no way of altering that £14 million unless a letter was written by both the Prime Minister and the Chancellor of the Exchequer to the Bank of England authorising it to go beyond the £14 million, and promising Parliamentary sanction.
The extraordinary thing about that figure of £14 million was that it lasted from 1844 right up to 1914 without necessity for any legal change. Indeed, it was not until the 1928 Act, which we have been discussing, that the fiduciary issue was raised to £260 million. As I understand the 1928 Act it was possible togo beyond that figure up to two years with the approval of the Treasury; but it was not possible to go beyond two years unless additional fresh legislation was introduced into this House.
I think that the Financial Secretary ought to tell us before we go much further with this Bill, even if he cannot tell us today, just what the significance is of the words
unless Parliament otherwise determines
in the 1928 Act. Otherwise we do not really know what substantial change we are making in the actual law under this Bill.
Since 1938 we have had the Macmillan Report, the last authoritative independent report on this matter; and that Report forcibly made the point which everybody has made today, that it is of course the control of bank credit more than the control of the note issue which is the prime mover in, at any rate, a large area of our economic affairs.
We cannot, of course, in this Bill establish the same Parliamentary control over bank credit as we have over the note issue. But I cannot help thinking that the whole question of the control of bank credit is one which Parliament may have to examine in the future. It is indeed rather anomalous that the profit due to the expansion of the notes accrues to the Exchequer, whereas the profits accruing on a vastly greater expansion of bank deposits simply accrue to the shareholders of private banks.
The Financial Secretary did not seem to realise that, in emphasising the importance of an expansion of bank credit rather than of note issue, he was advancing an argument which some people have thought established some case for the public ownership of the joint stock banks. I will not develop that argument today, but I do think the facts establish a case for keeping the interest rates which the Government pay to the Bank very low indeed, and not raising them to extravagant heights as the present Government have done.
Despite all these changes the Macmillan Committee did in fact recommend that there should be a fixed limit on the fiduciary issue, and it should be subject to Parliamentary control. But, of course, we have had other changes since then, not all of which have been mentioned today. I think, first, that we all recognise that the chief regulator of our economy now is neither the note issue nor the volume of credit, themselves, but the whole flow of incomes and expenditure as determined by the Budget and the decisions of the Chancellor in the Budget. Indeed, it is Parliamentary control over that which, I think, must be the most important control over economic policy in the future.
The next big change which has been less mentioned is the nationalisation of the Bank of England. That made a very sweeping alteration in the whole situation. That means, incidentally, that the whole profits of the Bank, and not just of the note issue, accrue eventually to the Exchequer, and the whole policy of the Bank is subject to the Chancellor in this House. I imagine—perhaps the Financial Secretary will assure us—that the Government have no plans for setting up a rival Bank of England under private enterprise

to stimulate the Bank to greater efficiency by healthy competition, and perhaps to finance its operations by advertisement rather than by charging interest to its borrowers? I hope that we shall have such an assurance, for one never knows what this Government will do.
There is a fourth and last important change which has been mentioned, and that is the creation of the Exchange Equalisation Account, which now holds virtually all the gold in the possession of Her Majesty's Government. The House ought to notice how relevant this is to the decisions which we are taking on this Bill. Perhaps the Financial Secretary will confirm that I am right in thinking that the Government could quite legally and quietly, without the sanction of this House, transfer hundreds of millions of gold from the Exchange Equalisation Account to the Issue Department of the Bank, and thereby increase the note issue by many hundreds of millions. At the moment the Government have £900 million of gold and dollars—I am not sure how much is gold—in their hands; which is a good deal less than when the Labour Government went out of office, as I often have to remind the Financial Secretary.
For all those reasons, I think we must agree that the control of the note issue is not in itself so vital as it was in earlier times, nevertheless it should be subject to Parliamentary control, if only in order to bring the operations of the Chancellor before this House so that they may be examined and debated. Do not let us forget that though an inflation of the currency in the future, if there were one, might not be initiated by the printing of notes, it remains true that it could not go beyond a certain point unless the notes were available. I fit becomes impossible for wages to be paid because of a great increase in money incomes, and a shortage of notes of that kind arises, we should have a crisis in the whole economy of the country. That is why I think we ought to look very carefully at this power, which is in effect being given to another place as well as to this House under this Bill.
I do not quarrel with the figure of £1,575 million which the Financial Secretary has derived from the existing size of the note issue; and I agree that the House of Commons should retain this power to


control increases in the maximum beyond a certain period of time. But it does seem to us exceedingly doubtful whether the other place should be given what really amounts to a veto after the event, which would produce a crisis, on the financial and economic policy of a Government which has a majority in the House of Commons.

6.34 p.m.

Mr. Boyd-Carpenter: With the leave of the House, I should like to reply to some of the points which have been put in the course of this extremely interesting debate which was, if I may say so, very much enlivened by the hon. Member for Nottingham, South (Mr. Norman Smith). I am bound to say that I thought he was showing the suspicious side of his character in considerable degree as he looked at the innocent and blameless Clauses of a Bill which very largely re-enacts existing provisions, in order to discover the fell and sinister purpose which he suggested existed behind what he was good enough to call my bland smile. I should like to follow up one or two of his suggestions.
First of all, the hon. Gentleman got the effect of the provisions with respect to demonetisation the wrong way round. He said "Why do you want to take power to call in and demonetise the £1 and 10s. notes?" That power has existed since the Act of 1928. There is nothing new about it. But he seemed to see even more sinister possibilities of mischief in the provision by which demonetisation is brought into this Bill in Clause 1 (5). All that subsection does is to take the 1928 Act provisions in respect of the £1 and 10s. notes and put on the same basis the same powers which exist in the Defence Regulation in respect of the £5 note or any notes which might subsequently be issued for higher amounts, and put them both together in this one Clause. That is all the operation does. That is surely an act of legislative tidiness which, whether consistent or not with a Socialist currency policy, I should have thought was a highly convenient step to take.
The hon. Gentleman then asked why we should want to call in these notes. There can be many reasons. A certain issue might be subjected, as I understand in the later stage of the war some of our notes were, to some organised campaign

of forgery. Another good reason for calling in the higher values of notes was that it enabled some check to be kept on transactions of one sort or another, which was, I understand, the reason the late Government called in the higher valued notes in 1945 and 1946. In answer to one of my hon. Friends who asked what had happened to the £10 notes, the answer is that they were called in in the course of that operation.
Those are both very good reasons, apart from the need to call in so as to re-issue a cleaner note, why this power is needed. The power, which is at present based partly on the old statute and partly on the Defence Regulation, is not a new power; it is a very necessary power in the management of a note issue.
My hon. Friend the Member for Altrincham and Sale (Mr. Erroll) raised the question whether the figure we had put into the Bill of £1,575 million was high enough, and the same point was raised by the hon. Members for Orkney and Shetland (Mr. Grimond), Sheffield, Park (Mr. Mulley) and my hon. Friend the Member for Barry (Mr. Gower). The reason we have selected this figure is, frankly, that it was the figure which represented the current level of issue at the time that the Bill was introduced. As I said in my earlier speech, this is not a matter on which one would wish to be obdurate, and if when we come to the Committee stage the level is higher and the Committee thinks fit, I would not wish to be dogmatic as to whether we should not take the then figure. Perhaps we can discuss that when we come to that point.
I would remind the House, however, that the lower we put the figure, the stronger we leave the degree of Parliamentary control, because the lower we put the figure the more likely will be the need to take the steps set out in Clause 2, under which Parliamentary authority is required for maintaining the note issue for more than two years above a basic figure. While I would not wish to be at all dogmatic about what precisely is the sound base figure to take for this purpose, I would ask the House to remember that the lower we place it the greater degree of control we leave in the hands of the House. However, that is a matter which we can debate in Committee.
I agree very much with my hon. Friend the Member for Altrincham and Sale that the consequences of the annulment of a Treasury order raising the level of the note issue could be very serious. It is, of course, clear that if we were to allow such a thing to happen it might cause quite a considerable dislocation of business. That is undoubtedly a matter which would have to be considered at that time if it ever arose, but it has never been thought wrong in this country to give powers to Parliament which, if used, might do considerable harm. If the Committee of Ways and Means were to reject a Budget Resolution, the consequences would be highly inconvenient, but it has never been suggested that for that reason the Budget Resolutions should not be subject to the Ways and Means Committee.

Mr. Jay: But the position concerns the power of the House of Lords where there might be a majority hostile to the majority of this House.

Mr. Boyd-Carpenter: The right hon. Gentleman must have thought me very ingenuous if he believed that I was not going to deal with that issue, but at the moment I am dealing with the figure. That was an issue which was raised by several hon. Members, and it would be very discourteous to the House if I were not to answer it. I think we shall proceed more speedily if we take the speeches as they were made, and come to that issue whenI get to the speeches where that was argued.
My hon. Friend also raised the question, as did several other hon. Members, of the design of the notes. I agree with much of what was said by several of my hon. Friends that the design and the cleanliness of the bank-notes are of considerable importance not only from the practical consideration of hygiene—which the hon. Member for Widnes (Mr. MacColl) referred to—but equally from the point of view of prestige. We are very concerned that both the design and the cleanliness should be of the highest possible standard. It is a fact that in recent years, in view of the strong need for economy, notes have been kept in circulation for longer than used to be the case, but the matter will certainly be looked at in the light of the comments made in this House and, for that matter, outside it.
May I also deal with a small point which, strictly speaking, I do not think arises on this Bill, but which was also raised by my hon. Friend the Member for Altrincham and Sale? He was concerned with the legal tender status of the gold sovereign. My hon. Friend referred to a case in the Italian courts, which appeared to lead to the view that those courts did not regard the English sovereign as legal tender. My hon. Friend may be reassured by the fact that, although the lower court appeared to adopt that view, on appeal a higher court took, from our point of view, a much more helpful view.
The hon. Member for Dunbartonshire, East (Mr. Bence) raised the question of what the fiduciary issue was. I thought his scholarly analysis of the derivation of the word was very good, and, of course, it has to do with faith. It originated when some notes were issued against gold as against others which were based on faith or confidence. The fiduciary issue is in a sense an issue which depends upon faith in the stability and probity of the British people and of the British currency.
A number of hon. Members, including the hon. Member for Sheffield, Park, the hon. Member for Islington, East (Mr. E. Fletcher) and the right hon. Gentleman the Member for Battersea, North (Mr. Jay), referred to Clause 2 (8) which states that a Statutory Instrument could be laid after two years to raise the level of the note issue and would be subject to annulment not only in this House, but in another place. Indeed, the hon. Member for Islington, East, with a vehemence which one does not associate with members of the legal profession, at any rate not members of the junior branch of the legal profession, referred to a startling innovation in powers which were given to another place and which they never had before.
I should like to analyse that proposition in the particular context of the control and the size of the note issue. The basis of that analysis must begin with the Currency and Bank Notes Act, 1928. As has already been pointed out to the House, under that Act the Chancellor of the day was entitled to authorise the raising of the fiduciary issue for a period of up to two years. The increase might not continue beyond two years unless Parliament otherwise determined.
As the right hon. Member for Battersea, North has pointed out and as I mentioned in moving the Second Reading of this Bill, these words are not a model of the draftsman's clarity, but probably they refer to the need for legislation, although other interpretations are possible. However, it does not affect this issue in view of the fact that one word is quite clear and that is "Parliament," which includes this House and another place. Under the Act of 1928, the power to raise the level for more than two years could not be exercised unless another place and this House were in agreement on the necessary Resolution or legislation. In either case, the consent of another place is required, and without that consent, as I see it, it would not be possible to continue the note issue for more than two years.

Mr. Jay: Is it not true that the operations of the other place under the 1928 Act would have been subject to the Parliament Act?

Mr. Boyd-Carpenter: Certainly, and if Mr. Speaker, in his wisdom, sees fit to certify the Bill as a Money Bill in the sense of the 1911 Act, then, of course, the hold-up will be restricted to a period of one month. But it is not for me to speculate on whether Mr. Speaker will issue a certificate in respect of the Bill. On the precedents, however, it does not seem to be in the class of Bills which have received certificates.
As the right hon. Gentleman should know, it is a fact that not all Finance Bills in recent years have received that certificate, and where we are concerned with a Bill such as this, which is not perhaps of excessive economic importance and which has only a very indirect effect on the national Exchequer, I would myself hazard the view that, judging by the few precedents which there are, Mr. Speaker would not think it necessary to issue a certificate. That is a subject which perhaps should not be discussed very fully now, since it is dependent on the judgment of the Speaker of the day.
But the point remains that unless Mr. Speaker issued a certificate that this was a Money Bill, under the Parliament Act another place would have just the same powers as the hon. Member for Islington, East has described as a startling innovation and powers which they never had before.

Mr. Jay: Is that entirely accurate? After all, there is a time-limit for the power of the other place under the Parliament Act for Bills other than Money Bills.

Mr. Boyd-Carpenter: Yes, one year, but the right hon. Gentleman is not seriously suggesting that he would meet the inconvenience if another place rejected the raising of the note issue for one year by saying that it could be passed one year later under the Parliament Bill. Surely during the interval the trouble would arise.

Mr. Jay: I was suggesting there is a legal distinction.

Mr. Boyd-Carpenter: But the right hon. Gentleman's whole point is that he fears the disruption of the financial policy of the Government.
That, then, is the position in relation to another place as far as the 1928 Act is concerned. Now let us take the position under the Defence Regulations which we are proposing to revoke. These Regulations depend on the supplies and services legislation which is subject to annual renewal, for which the full consent of another place is required. Therefore, once again, in the ultimate analysis, another place had on this issue under the Defence Regulation procedure the same share in the control of this matter as it would have under these proposals.
Therefore, although I shall be happy in Committee to discuss these proposals on their merits, it is not fair to suggest that there is anything in these proposals which alters the constitutional position in this respect between this House and another place. It may well be that hon. and right hon. Gentlemen opposite would like to see a diminution of the authority of another place. That is a public issue on which it is legitimate to hold one opinion or another. I doubt whether it is a particularly convenient way of discussing or handling it to try to nibble away one piece of an existing power because one Bill happens to be before this House but that can be discussed at another time. All I am inclined to argue now is that it is quite untrue to say, as the hon. Member for Islington, East suggested, that there is here any elaborate scheme for aggrandising the authority of another place.
The hon. Member for Sheffield, Park, who was good enough to indicate to me that a pressing engagement prevented him from hearing my reply to his interesting speech, said a number of things with which I would be far from disagreeing. I agree freely with his assessment, which I thought was fair and balanced, of the relative importance of the fiduciary issue. The hon. Gentleman asked why there was any gold left in the Issue Department. A small sum has been left, largely perhaps for historical reasons, largely also because the fiduciary issue by definition represents that issue over and above that which is backed by gold. If there were none backed by gold, the theoretical basis of the fiduciary issue would look a trifle odd. 
The hon. Gentleman raised also the question of legal tender and asked why it is provided that notes above £5 should be legal tender. The reason for that broad division is that it is thought right, and it is part of the tidying-up operation of this Bill, that all Bank of England notes should have the same status. The point is largely academic because the only notes in issue are the £5, £1 and 10s., and at the moment, therefore, though it is undoubtedly the fact that were such an issue to be made it would have legal tender status, no practical difficulty arises.
Finally, the hon. Gentleman raised the point of the penalty under Section 12 of the 1928 Act and asked why it had not been increased. That is a broad issue which has been discussed in this House many times on penalty Clauses. There is an argument that the change in the value of money makes it desirable to step up penalties, but if that were a step to be taken, I should have thought it should be taken more generally than in the rather narrow connotation of a Currency and Bank Notes Bill.
I have dealt with the point raised by my hon. Friend the Member for Barry with regard to the absence of £10 notes. I agree with much of what was said by the hon. Member for Widnes about the desirability of the notes being in a clean condition. I have already dealt to some extent with what he said on that, and I will only add that I am not sure of his reason for saying why he would not like to produce a £1 note in my presence. If

I were as suspicious as the hon. Member for Nottingham, South I should read a singularly sinister connotation into what was I am sure a basically harmless observation.
I have tried to deal with a wide variety of points which have been raised in the course of this debate. I hope that I have covered the ground and that the House will be prepared to give the Bill a Second Reading.

Question put, and agreed to.

Bill accordingly read a Second time.

Committed to a Committee of the whole House.—[Mr. R. Thompson.]

Committee Tomorrow.

ELECTORAL REGISTERS BILL

Order for Second Reading read.

6.56 p.m.

The Secretary of State for the Home Department (Sir David Maxwell Fyfe): I beg to move, "That the Bill be now read a Second time."
This is a small and, as far as party politics are concerned, an agreed Measure to alter the date of publication of the register of electors from 15th March to 15th February. Those concerned with elections, and particularly with the county council elections in England, have wished for the register to be published earlier ever since the present arrangements were made in the Representation of the People Act, 1948.
At that time the dates for local government elections were altered so that all could take place in the spring. The choice of date was limited for obvious reasons, and eventually it was agreed that the English county council elections should be held early in April and other local government elections early in May. At that time, however, it was not possible to provide for the register to be published earlier than the middle of March. The reason was that the printers were in difficulty owing to their pre-Christmas work.
The printing situation has now changed, and the printers have agreed that they could now undertake to publish the register in February provided suitable adjustments were made in the other dates governing the preparation of it. We thought that this opportunity to make a


change should be taken and we found that everyone concerned welcomed it.
The main advantage of the change is that it will allow a long interval between the publication of the register and the county council elections in England. This will be particularly important in 1955, when Easter comes on 10th April. Otherwise there would be a very short period between 15th March and the date of the election. Another advantage is that it will mean an easier time for the house-to-house canvassing; there has been complaint about canvassing in November. Also it will be better if the same qualifying date and the same period for objections obtains in Scotland as in England.
Everyone here, I think, appreciates that one has to work back from the date of the publication of the register to the qualifying date, and to leave periods for the various stages. All of this has been done carefully and with complete agreement. This will mean that the period for claims and objections will be what is desired, and I understand that there is a provisional agreement that it should be extended from 15 days to 19 days, beginning on 28th November and finishing on 16th December. These dates for claims and objections will be fixed by regulations which will be submitted to the House for approval as soon as may be convenient after the Bill becomes law.
I have not gone through all the details, but I have them and would be pleased to do so if necessary. These proposals have been discussed with the chief party agents and with representative registration officers. In England the County Councils Association and the London County Council have also been consulted, and the other local authority associations have been kept informed. Everyone welcomes the proposals, and I may say that no one wishes to make any further change.
Scotland and Northern Ireland have been most co-operative and have raised no difficulties about falling into line. Thus the Bill is in every sense an agreed Measure, and as it is most desirable to enable the printers, registration officers and others concerned to make the necessary adjustment in their arrangements for preparing the 1955 register as soon as possible, we hope that the House will be willing to give the Bill a speedy passage.

7.0 p.m.

Mr. Ede: I welcome this Bill. As the right hon. and learned Gentleman the Home Secretary has said, it is the result of prolonged discussions between those who are most intimately concerned with the preparation and publication of the register, and it is a good thing to know that the printers are satisfied that they can get the register out by the appropriate day. I am quite certain that had the printers been able to give that assurance in 1948, something very similar to this proposal would have been enacted for England and Wales, instead of the proposal that was actually embodied in the 1948 Act.
As the right hon. and learned Gentleman knows, I have some misgivings about one matter. If the qualifying day is 20th November, the house-to-house canvass starts somewhere about 1st October, and where persons are found to be not at home on the first visit it is sometimes necessary to pay a second visit and sometimes even a further visit to ascertain who in that house is qualified to have his or her name inscribed on the register. If we go to 10th October, in the same way the house-to-house canvass will have to be started probably about 1st September, or quite possibly during the last week of August.
That might not have been so serious a problem a few years ago, but in these days when the principle of a seven or 14 days' regular holiday every year has been conceded to a very large number of the population—I believe with very considerable beneficial results—it is clear that, when we get back to the last week of August and the early part of September, we shall find a larger number of people who will be on holiday when the canvasser calls. I hope, therefore, that in any circular which he issues to registration officers, in the event of this Bill being enacted, the right hon. and learned Gentleman will make it quite plain that the desire of Parliament is that the alteration of the date shall not lead to any lessening of the number of legitimately-qualified people whose names appear on the register.
All of use here know, as a result of our experience at elections, that no matter how skilled our agent or our opponent's agent, or how careful the registration


officer, on the last three or four days before the poll one finds in one's committee rooms a number of people who are duly qualified to be on the register but somehow or other have been missed. I believe that in recent years there has been an increasing efficiency in the canvass and in the register, and it would be a very unfortunate thing if this greater facility for the use of the register in county council elections should result in more people than at present being disfranchised through the kind of inadvertence that somehow or other occurs.
The difficulties that are likely to arise in practice will depend more upon the regulations than upon the terms of this Bill. What happens here is that we alter the date from 20th November to 10th October, and all the problems of the intervening period between that date and the date of the publication of the register will be dealt with in the regulations. I am told—and I had to go to some trouble to find out—that agreement on one point was rather assumed by the right hon. and learned Gentleman. I am told that the date that was agreed by everybody as a date on which residence has to be proved was 15th October and that thereafter the registration officers and the printers agreed that they could go back to 10th October. But I have it in writing that the chief party agents were not so informed and that at least one of them had a bit of a shock when he saw the date was 10th October instead of 15th October.
This will mean that there will be five extra days between the date on which the person has to be resident and the date on which the register will be published. I hope that it will be possible to consider in conference before the regulations are published—and this is entirely a matter for the regulations—some of the sub-divisions of that period. Perhaps it may be possible to give another couple of days for some of the activities of the agents, without putting anybody in any difficulty over the matter.
I hope, therefore, that after he gets the Bill on the Statute Book, the right hon. and learned Gentleman will arrange for a conference at which this matter can be discussed a little further because I think it may be possible to arrive at a unanimous decision on one of these issues

on which I think that on the last occasion a compromise was reached by which everybody was equally inconvenienced. Neither got exactly what he wanted, but as each person had lost a little it was felt that that was "fair doings" all round. I hope, therefore, that the right hon. and learned Gentleman will agree that there shall be at least some further discussion before the publication of the regulations.
Apart from that, I think that I can advise my right hon. and hon. Friends to support this Bill; and I can share the right hon. and learned Gentleman's wish that it may have a speedy passage to the Statute Book, because it is desirable that the exact procedure for the future shall be known as speedily as possible.

Sir D. Maxwell Fyfe: I give an undertaking that there shall be consultation before the regulations are made.

7.9 p.m.

Mr. John Taylor: When my right hon. Friend the Member for South Shields (Mr. Ede) started by giving praise to and welcoming this Bill, I thought that it would be necessary for me to proceed with some circumspection in venturing to ventilate some doubts about the Bill. But my right hon. Friend's later qualifications encourage me to state these doubts, which I think are cogent and ought to be stated.
I am not so sure about the wisdom of passing a Bill which, for the sake of the elections which we hold once every three years, renders older a register for the annual elections which we hold in this country. I believe that the existing timetable is all right. It has operated successfully for a number of years. The difficulties which have been mentioned are not difficulties or problems which have arisen in the minds of those who manage elections. There has been no protest by candidates or agents.
The difficulties have been purely technical difficulties mentioned by printers, so far as we are led to understand from the information given to us by the Home Secretary. I believe that the printers' objection was that the Christmas holiday period rendered their time rather short. I do not know that the vitally important business of running elections in a democracy should be at the mercy of the convenience of the printing profession, a very great and efficient profession as it is in


this country. We do not consider the convenience of printers when it comes to printing other matters in our election procedure. When we want ballot papers printed, we say, "We must have these papers by midnight the night after tomorrow," and we get them.
These five days, which have been stolen without any apparent consultation and agreement, are really important in the limited time-table between the qualifying date and the date of publication of an annual register. I understood that 15th October was agreed, but in the Bill it is 10th October. On inquiring why this should be so, I was given to understand that it is because the assessors, the registration officers in Scotland, objected. Only a Scottish Member could say this in this House. I object to the whole of the procedure for elections being changed and the agreement being changed at the whim of assessors in Scotland. I say "whim" because, for a long time, I have wanted the opportunity to say this.
I am not satisfied that the registering of electors in Scotland is in the best hands when it is in the hands of assessors. I think it would be better in the hands of registration officers concentrating upon that job. Assessors are very worthy people. Those of us who have any connection with local government finance in Scotland know that they do that job with admirable efficiency. The majority of ratepayers, as I am sure the Joint Under-secretary of State for Scotland would agree, say that they do it with too much efficiency. But this is a sideline for them. I have often felt, having had some experience of the registration of electors both in England and Scotland, that there is room for improvement there. I cannot see what technical difficulties arise which induced them to alter the whole of the agreement for the sake of these five days, which have such an important effect at a crucial time of the year in the preparation of registers.
My objections to the Bill are these. I am rather conservative in this matter. I think the qualifying date might well have been left alone. I am disappointed in the Bill to that extent, and I am disappointed by what is not in the Bill. I should have thought that experience of the working of the 1949 Act—which made so many necessary and urgent changes in our electoral procedure—had

shown that one or two things we have learned might with profit have been put into this Bill. I think it a pity they are not in it. I am disappointed at what is in the Bill and at what is not in the Bill—otherwise it is not a bad Measure.
We ought now to look again at one provision in the 1949 Act which has never been implemented, namely, the publication of a half-yearly register. On all sides of the House that was agreed to be a good thing and a thing that was overdue; but it was never implemented because of the necessity for us all to economise in all expenditure not vitally essential to the country's well-being. The time is coming when we ought to receive from the Minister some kind of declaration about when it might be possible to resume publication of a half-yearly register of electors. In these days of many removals, it is impossible to secure a reasonably accurate register of electors on which to contest elections properly if it is published annually. I express the hope that we may have some kind of announcement about reversion to what was the beginning of the practice of a half-yearly register.
I am sure that I speak with the unheard applause of every election agent in this country when I make a plea for more caution on the part of registration officers and a plea for a more emphatic statement, either in the Bill or in the regulations, about alphabetical registers. It was stated somewhere in a statute or in previous regulations that registers should be in street order where streets exist. It is also left to the discretion of registration officers whether they shall print the register in street or alphabetical order of the surnames of the people living in the polling district. That should be more clearly stated and more definite guidance or instructions should be given to registration officers. It might have been put in this Bill, but it might well be in the regulations arising out of the Bill, that where streets exist it is the wish of Parliament that the register should be in street order; and where streets exist in only part of a polling district, that should not be an all-clear for the registration officer to print the whole of the names in that polling district in alphabetical order.
There is need for legislation to remove an injustice regarding the postal vote.
I am sorry to see that that is not in the Bill. Under existing legislation facilities exist for according the postal vote to electors who have moved to another constituency. That facility operates for one register only, but does not operate for all electors who move from one constituency to another.

Mr. Speaker: I think the hon. Member is now straying from the scope of the Bill, which is really confined to the alteration of dates. These wider matters are perhaps outside its scope.

Mr. Taylor: Thank you, Mr. Speaker. I have only once before been called to order by the Chair in this House, and both occasions were rather terrifying. I must confess that on this occasion it was not unexpected. Of course, I bow with the Ruling. Perhaps an opportunity may present itself for me to develop that matter on some other occasion.
Having, with some adroitness, managed to get several points in on a subject in which I engaged for many years and on behalf of a body of men and women who are engaged in this very important business—important to Members of Parliament and to the general public—of managing elections, and managing them in complete spirit of the law and the best principles of democracy, I am glad, after all that I have said, to welcome the Bill, although there might have been a little more experiment. I still have a doubt about extending the older register—an annual register at that—for the important annual elections. Nevertheless, I think it might be wise to make the experiment and, within the Regulations, which will be more important than this Bill, we may get some improvements of the kind I have been trying to advocate.

7.20 p.m.

Mr. Arthur Skeffington: I should hesitate to say anything after the expert speech of my hon. Friend the Member for West Lothian (Mr. J. Taylor), but I have from time to time had some slight professional experience on inquiries set up by the Home Office in connection with the alteration of local government ward boundaries. On those occasions it has been borne

in upon anyone present, both by the political agents and by the registration officers, that the present publication date, particularly in relation to county council elections, leaves very little time for the electorate to understand any changes that are made.
Last year, for example, I was concerned with an inquiry in a borough where there were no fewer than 18 boundary changes in 20 wards. The registration officer said that for years many of the electors had been accustomed to going to the same polling places, and that if the register were published only on 15th March, the county council elections being in April, there was very little time for electors to be made aware of any new arrangements. Therefore, from such experience as I have had, I am certain that the earlier date will be welcomed, certainly in connection with county council elections.
I do not know whether the Minister who is to reply can say anything about the publication of registers twice-yearly. This was one of the casualties of economy. Undoubtedly, the registers for the two recent by-elections were very old indeed, and the qualifying date would now be more than 12 months old, both in the election which is being decided today and that which took place a few days ago. In today's instance, however, I am sure that it will in no way affect the result. Nevertheless a number of electors will have been disfranchised, and both political parties have been put to considerable trouble.
It would be helpful to have an indication whether the Home Office think that within a reasonable time the register may be published twice-yearly, as was promised. Apart from that limited experience of mine, the Bill is very much to be welcomed. I have, however, heard whispers about the October date, and I hope that the Home Secretary will be able to give this aspect his attention.

Sir D. Maxwell Fyfe: Sir D. Maxwell Fyfe indicated assent.

Question put, and agreed to.

Bill accordingly read a Second time.

Committed to a Committee of the whole House.—[Mr. Redmayne.]

Committee Tomorrow.

Orders of the Day — ARMED FORCES (HOUSING LOANS) BILL

Order for Third Reading read.

7.24 p.m.

The Civil Lord of the Admiralty (Mr. Wingfield Digby): I beg to move, "That the Bill be now read the Third time."
There is little that I need say in commending the Bill to the House. It will, as hon. Members know, enable steady progress to be made with the building of married quarters for the Service Departments. All three Services will build quite a large number of houses under the Bill, but I should like to take this opportunity of saying a word or two about the special position of the Royal Navy.
Under the Bill, it is hoped to build 4,300 houses for the Navy, as against 2,087 which have been built, or are being or are about to be built, under the Act which the Bill is designed to extend. The great majority of the married quarters which have been built so far for the Navy have been for isolated stations that are rather cut off from the rest of the community and in places where there was special difficulty for Service families in obtaining houses.
It was announced to the House some months ago that married quarters were planned for the home ports. If the Bill becomes law, it is hoped to build the vast majority of the new married quarters—some 3,800 out of the total of 4,300—in the home ports. The House may be interested to know when it may be expected that the houses will be built. First, of course, the existing programme for the more isolated stations has to be completed, and this will take a little time. Furthermore, there is the difficulty of finding sites at the home ports. This is being looked into and we are endeavouring to find suitable sites.
It may be that for reasons of that kind it will be found desirable to build flats as well as houses. We are, however, pressing on with the work and we believe that during the next financial year we will be able to make a substantial start on the building of houses in the home port areas. They will be apportioned in relation to the number of establishments in each home port, so that in the result there will be considerably more houses in the Portsmouth area than at Plymouth or Chatham.
I know, from numerous visits to naval married quarters, how much they are appreciated by those who live in them and how well they are looked after. I therefore feel that the Bill will play a useful part in continuing the steady progress of the married quarters programme, not only for the navy, but for the other Services also.

7.28 p.m.

Mr. Walter Edwards: It is not my intention to detain the House very long, but I thought it necessary to express our welcome to the Bill from this side of the House. Obviously, it will increase the number of married quarters available to those serving in the three Services. Important as other Bills appear to be, this is a very important one from the point of view of approximately the 14,000 families in the three Services. Obviously, anyone with any feeling for those who serve the country must welcome a Bill of this kind.
I am rather mystified by the Civil Lord's figures of the number of houses which the Admiralty are to get from the £35 million. In my view, as we have been able to build or to commence building 15,531 houses with the earlier £40 million, my rough calculations show that the £35 million which the Bill provides should allow for 14,000 houses. On the figures which were given to us by the Under-secretary of State for Air on the occasion of the Second Reading of the Bill, that there were to be 60 per cent. for the Air Force, 27 per cent. for the Navy, and 13 per cent. for the Army, I came to the conclusion that out of this £35 million the Air Force would get 8,400 places, the Navy 3,780 places and the Army 1,820 places.

Mr. Digby: Perhaps the hon. Gentleman would like me to answer that point now. In point of fact, we shall get rather more, partly because the houses will no longer be constructed in isolated places and will, for that reason, be cheaper to build, partly because we expect building costs to come down a little, and partly because we have £500,000 left over from the present Act, which will be brought into the programme.

Mr. Edwards: If there is to be money over it will naturally enable a larger number of houses to be provided. I think the hon. Gentleman is rather optimistic.
however, in thinking that building costs will come down at a time when all workpeople in the country are making applications for increased wages as a result of the rising cost of living. I should have said, on the contrary, that the amount per house might be even higher under this £35 million provision than it was under the £40 million provision in the 1949 Act.
I wonder what sort of committee dealt with this matter; I presume it was a committee of the Ministry of Defence. In the case of the £40 million, it was obviously decided by the three Service Departments that the 15,531 houses should be divided as follows: 2,087 for the Navy, 7,017 for the Army and 6,427 for the Air Force. According to these figures the Air Force must now get at least about 8,000—[Interruption.]—9,000—out of this £35 million and the Navy is to get 4,300, making a total of 13,300.
While I am not an advocate for the Army as against the Navy and Air Force, it appears to me that somebody in the War Office has been lacking in advocacy in enabling this £35 million to be spent in a way in which the Army will get scarcely any benefit. If we assume the number to be 15,000 houses as against my estimate of 14,000, that only leaves 1,700 houses for the Army, as there are to be 13,300 divided between the Navy and Air Force, which means that out of £75 million borrowed for married quarters for the three Services, the Army, with its very large numbers of men serving, will have fewer than 9,000 houses completed, while the Air Force, as I said, will have more than 15,000 houses, and the Navy, I am very glad to see, will have 6,300.
While I am not arguing against the £35 million in any way, I think that the question of allocations should be much more flexible than it has been stated to be at present. The Navy wants more houses, and I rather feel that the Army wants more. If an agreement can be reached, and we can be assured that there is to be flexibility with regard to the needs of the three Services, and that the Government are not to be dogmatic about the percentages announced on Second Reading, I am sure we shall be perfectly satisfied.

7.34 p.m.

The Parliamentary Secretary to the Ministry of Defence (Mr. Nigel Birch): The allocation between the Services has been carefully worked out between them on the basis of whose need is greatest. It is thought at the moment that the War Office is rather ahead of the other Services, but there is nothing in the Bill which lays down exactly how these sums are to be allocated. If there were any basic changes, it would be perfectly easy for there to be flexibility.

Question put, and agreed to.

Bill accordingly read the Third time, and passed.

Orders of the Day — NAVY, ARMY AND AIR FORCE RESERVES BILL

Not amended (in the Standing Committee), considered.

Motion made, and Question proposed, "That the Bill be now read the Third time."

7.36 p.m.

Mr. A. Fenner Brockway: I wish to ask that I might have before the whole House confirmation of an assurance given during the Committee stage. It relates to the men who develop a conscientious objection when they are called up as reservists. I should like to express my appreciation of the efforts made by my hon. Friend the Member for Dudley (Mr. Wigg), my right hon. Friend the Member for Dundee, West (Mr. Strachey) and my right hon. and learned Friend the Member for Rowley Regis and Tipton (Mr. A. Henderson), and equally of the assurances which were given by the hon. Gentleman opposite.
The assurance to which I wish to draw attention was:
There is no question at all of these men having to be sentenced to three months before they can apply to a tribunal. What happened, and it worked well, under the Z and G call-up, was that they could apply to existing tribunals. So far as I know there was no complaint about the way in which that worked. I think that about one in 900 was released as a genuine conscientious objector. The plan of the Government, which they think would be more flexible and probably more effective than a comprehensive scheme put into the Bill, is to deal with the matter administratively, as was done in the original call-up."—[Official Report, Standing Committee A, 24th November, 1953; c. 10–11.]


The right hon. Member for Dundee, West then asked for a specific assurance. He wished to know whether in this more permanent scheme it is perfectly clear that these men will have access to the existing tribunals. The Minister said he could certainly give that assurance.
It is not because I am in any way desirous of expressing doubts about the assurance given in Committee, but because I think it is well that this should be on the records of the House that I am repeating the question now.

7.38 p.m.

The Parliamentary Secretary to the Ministry of Defence (Mr. Nigel Birch): I can give the hon. Member this assurance. The intention is to proceed in the same way as the previous Government did under the Reserve and Auxiliary Forces (Training) Act, 1951.

Question put, and agreed to.

Bill accordingly read the Third time, and passed.

Orders of the Day — CINEMATOGRAPH FILM PRODUCTION (SPECIAL LOANS) [MONEY]

Resolution reported:
That, for the purposes of any Act of the present Session to extend the period during which loans and advances may be made under the Cinematograph Film Production (Special Loans) Acts, 1949 to 1952, to authorise the National Film Finance Corporation to enter into special arrangements with respect to certain loans, and for purposes connected therewith, it is expedient to authorise—
(a) any increase attributable to the provisions of the said Act of the present Session extending the said period from five years to eight years in the sums which under or by virtue of the said Act of 1949 are to be or may be issued out of the Consolidated Fund, paid out of moneys provided by Parliament, raised by borrowing, remitted or paid into the Exchequer;
(b) the remission in whole or in part, where any such arrangements have been entered into with respect to a loan, of payments by the said Corporation to the Board of Trade, being payments of amounts in or towards repayment of any advance made by the Board under section four of the said Act of 1949 and used for the purposes of that loan or payments of interest on any sums for the time being outstanding in respect of any such advance.

Resolution agreed to.

Orders of the Day — CINEMATOGRAPH FILM PRODUCTION (SPECIAL LOANS) BILL

Considered in Committee.

[Mr. HOPKIN MORRIS in the Chair]

Clause 1.—(EXTENSION OF PERIOD FOR MAKING LOANS.)

7.40 p.m.

Mr. Harold Lever: I beg to move, in page 2, line 6, to leave out "eight," and to insert "six."
The intention of this Amendment is to restrict the operation of the principal Act to one year from the period when it would have expired instead of three years, which is the extension proposed by the Government.
Before we decide what is the appropriate period for the principal Act to be extended, the Committee should know what it is we are extending, what has been the consequences of the principal Act for the past five years in which it has been in operation and what it is desired to achieve. We cannot decide how long we should extend the principal Act unless we know what it is that is sought to be achieved by it. In order that no one should be led to attempt to invoke the rules of order, may I make it plain that I do not intend to occupy more time than is necessary to make the points which I wish to make to the Committee.
When one considers the Second Reading debate on this Bill, one discovers an astonishing position. The Government have not chosen to tell the House why they wish the Bill extended for three years. So far as I can discern the Parliamentary Secretary gave no reason whatever for extending this Bill for three years. I asked the Parliamentary Secretary if the three-year period was to be the final period and he was not prepared to say. He was not prepared to say that it was the final period or to attempt to bind the House. I did not ask him to bind the House. I asked for a statement of the Government's intentions. I was not asking him to break a constitutional principle known to every first-year law student, and he should have that clearly in his mind. What I desired to know was something about the intentions of the Government.
I may say at once that I shall be as helpful to the Government as possible. I shall try to assist them to make good the glaring omissions so far revealed in their treatment of the Committee. I imagine, as there was agreement on this matter in general principle between the Government and the Opposition Front Benches, that the Minister and his Parliamentary Secretary have been misled about this whole matter, and that they decided they could get this Bill without giving any information at all. But at least the Government should take the Committee into their confidence and tell us what is their present intention in the matter.
Do they intend this three-year period to be the last? Will they tell us why they want a three-year period? Is it to perpetuate the principle of the Film Finance Corporation, or to alter it and make it permanent in an altered form? Or is it to evolve a policy for the film industry? We cannot ignore the fact that the instrument we are asked to extend was originally a temporary measure. It was brought before the House by my right hon. Friend the Member for Huyton (Mr. H. Wilson), when he was President of the Board of Trade, as a means of rescuing the film production industry. My right hon. Friend told the House then that it was a temporary measure, a regrettable necessity, and with considerable reluctance the then Opposition, represented by the present Secretary of State for the Colonies, agreed to it as a temporary measure.
At that time an assurance was given that there was no intention of providing a subsidy for the film industry and that the debt would be self-liquidated. The industry was told five years previously to mark the fact that the Bill would come to an end, and in those circumstances we are entitled to an explanation about why there is to be an extension for another three years. What has happened to cause the change? It is a colossal piece of bluff which happily the Government have not been able to get away with. They now ask for a three-year extension, as if it was the most natural thing in the world, and calmly overlook the fact that the Minister who introduced the Bill originally said that it was a temporary

measure, and that that was agreed to by the Opposition.
When further money was required and a further extension in 1950, when another £1 million was asked for, the present Secretary of State for the Colonies, speaking for the then Opposition, objected, and said that it was only a temporary measure. He even asked my right hon. Friend what he was gestating. He said my right hon. Friend had had seven months gestating a policy and nothing had appeared. The Government have now had a two-year gestation period and I am wondering whether it is a baby white elephant they are about to produce.

7.45 p.m.

The Committee are always sympathetic in these matters if they are taken into the confidence of the Government. If the right hon. Gentleman has a policy—even if it is a baby white elephant—we shall sympathise, but he must tell us. He cannot say, as he said to me when I asked why it was the Government's intention to have a three-year period, "It is going to be three years, because that is what I think right at the moment."

The Minister did not give a single reason. As cool as may be he said, "It is going to be three years, because I think that is right." He must realise that that will not do. Even with Front Bench agreement for such a proposal it is not acceptable. On Second Reading the Parliamentary Secretary said that there was only one hon. Member opposed to the Bill. But if he thinks that he is misled. I am not the only one opposed to the Bill. There exists a feeling of the greatest disquiet among hon. Members in all parts of the House about this matter, and particularly about this three-year period.

If an extension is sought as cover for the production of a policy, then a year is quite enough. If it is to be merely a chronic putting off, a sort of sop to the skilled procrastinators at the Board of Trade, then a three-year period is not enough. There have been five years and practically nothing has been done. Why should a three-year period be any better unless the Government are proposing to produce a policy? Five years ago when this was first introduced the film industry, and presumably the public, were asked to mark the words used from both Front Benches, and by back-bench Members also, to the effect that there was to be


no subsidy; and that the Measure was a temporary one for five years. Now the film industry and the public can mark the value of those words.

In my opinion a three-year period is either too short or too long. If a policy is to be forthcoming it is too long. If we are to be humiliated again when the three years have expired then it is too short. I prefer a quinquennial humiliation rather than a triennial one. If the House has to eat its own words it is more helpful that it should be done rather less frequently than is provided for by the Bill. If the Minister assures me that it is intended that the House shall be humiliated again I will withdraw my Amendment.

I must comment on the astonishing behaviour of the Government. They have come to the House as if it is the most natural thing in the world that they should get an extension without any apology or explanation—

The Deputy-Chairman (Mr. Hopkin Morris): I would remind the hon. Member that he has now repeated his argument several times.

Mr. Lever: That was merely in order to break new ground and to ask the Government whether the original policy still stands. The Film Finance Corporation was set up by the original Act. Presumably those responsible read the speeches on Second Reading, Committee Stage and Third Reading saying that the Corporation was to be self-liquidating, and so on. Have they been told of any change of mind about the extension? What is behind it all? Can we now have a little more information from the Government?
There is another question I wish to ask. I asked it on Second Reading but the Minister, for his own reasons, thought that there was no need to reply. I put the question again. I cannot for the life of me see why the Minister did not reply on the first occasion. Perhaps he was under the illusion that the Front Bench agreement would save him the necessity to answer these questions or the need to learn too much about the film trade which he has in his charge.
Before we extend the Act, we are entitled to be told how much it has cost so far. I do not want out of date book figures of the Film Finance Corporation. This entirely relevant and fundamental

information ought to have been proffered to us by the President of the Board of Trade. When I asked the question in the middle of the Second Reading and got no reply, I can only assume that neither Minister then knew the answer I cannot believe that they intended to be obdurate and to tell the House, "We want you to extend the Corporation for three years, and mind your own business how much it has cost so far." That is what it means if the hon. and learned Gentleman does not answer the question today.
If he asks for three more years he must tell the Committee the cost so far. How can we vote for a three-year extension when the Minister will not tell us that?

Mr. Leslie Hale: I am trying passionately to follow the argument. I do not know much about films. About 10 minutes ago my hon. Friend convinced me that I ought to vote in favour of substituting the word "six" for the word "eight." Five minutes ago he rather turned round and thought that it was as well to substitute the word "ten" for the word "eight." Now I gather that he is going back to the word "six." I suggest that there must be some time in his speech when he tells us whether he is supporting the Amendment or moving its rejection. I should have thought that—

The Deputy-Chairman: The hon. Member must reserve his argument until later.

Mr. Hale: I am much obliged. In those circumstances, I will address the Committee later and put my points. I hoped that I could put them in a single sentence rather more speedily.

Mr. Lever: I have always found the hon. Member for Oldham, West (Mr. Hale) most helpful. Especially when the argument is likely to be clouded, an intervention by my hon. Friend brings us back again to a point which ought to be considered most carefully.
If the Government hope to do what they should have done long ago—and that is produce a policy for the film industry—one more year is quite enough. Then, if they show signs of applying themselves to the task for which they hold office, at the end of the year they will be given a sympathetic reception if


they have not completed the job. I ask the hon. and learned Gentleman to say how much the Corporation has cost so far.

The Deputy-Chairman: I hope that the hon. Gentleman will not repeat the same question indefinitely. Once is quite sufficient.

Mr. Lever: I repeated the question about how much it has cost because I want to know how much the Parliamentary Secretary thinks it will cost if we extend the Corporation for three years rather than for the one year which I suggest. We really cannot vote the Corporation into existence for another three years without knowing how much it has cost in the past or how much it will cost in future. That is how it appears to me in my somewhat naive approach to these matters which affect public money. If it costs rather less than what it costs to provide cigarettes for old age pensioners, I might vote for it, and if it costs rather more than the provision of battleships for the Royal Navy I must vote against it.

The Deputy-Chairman: The Amendment deals with the change in the number of years.

Mr. Lever: Whether or not we vote for the continuation of the Corporation for three years must depend on the cost of it. If it is very expensive we may say that we can afford it for a year more but not for three years. I do not see how we can tell whether we ought to keep the Corporation in being for another year, three years or 10 years until the Minister is kind enough at this late stage to confide in us how much it has cost in the past and how much he estimates that it will cost in future. Does the hon. and learned Gentleman know?
I hope that the hon. and learned Gentleman will acquit me of discourtesy when I say that one got the impression on Second Reading that, though the Minister had been briefed on the assumption that the Second Reading would consist of a very pleasant interchange of compliments, there was very little—

The Deputy-Chairman: The hon. Gentleman must not review the Second Reading debate. He must confine his remarks to the Amendment.

Mr. Lever: Then I will make the point shortly. We cannot decide whether the Corporation should stay in being for another one year, or three years until we know what are the powers of the Corporation. If the powers are reasonable, three years might be appropriate. If the powers are unreasonable and unwise the Committee might well vote for one year as the most they can allow without asking the Minister to come back again.
Will the Minister be kind enough to tell the Committee what is the policy of the Corporation? We do not know. Until we know, how can we decide whether the Corporation should continue for one, three or more years? We do not know its policy. I asked on Second Reading whether it had the power to lend money without the bona fide expectation of getting it back.

Mr. Hale: Hear, hear.

Mr. Lever: My hon. Friend says, "Hear, hear," but the Minister's reply was extraordinary. He reminded me that I was a member of his profession and that the Act was available to be read. I still want to know something about the powers of the Corporation, and the Committee must want to know before it can decide whether to entrust the Government with power to continue the life of the Corporation for one year or three. Will the hon. and learned Gentleman now tell me whether the Corporation has power to lend money without the bona fide expectation of getting it back?
It was not my intention to speak for too long. I did not intend to prolong the debate, though I could do so. I have had a very generous measure of indulgence, and I suggest that the questions I have asked are most relevant. It is most staggering to me that the House should be asked to decide whether the Corporation shall continue for one year, three years or more without being told how much has been the cost; how much the concession is expected to cost in the three years ahead; what the policy of the Corporation is, or even why there has been a complete volte-face on the part of both Government and Opposition Front Benches.

The Parliamentary Secretary to the Board of Trade (Mr. Henry Strauss): I think that it will be generally convenient if I do not repeat any argument that was


used in the Second Reading debate but confine myself to the Amendment proposed by the hon. Member for Cheetham (Mr. H. Lever). The effect of the hon. Member's proposal would be that the powers of the Corporation would be extended for one year only. For the reasons given by almost every other hon. Member who took part in the Second Reading debate, it is quite clear that one year would be insufficient. In an industry where I should have thought it would be the unanimous view of the Committee that some planning ahead and certainty about the future was desirable, I suggest that to extend for one year only would be insufficient if the Corporation was to achieve any of its objects.

8.0 p.m.

I hope that hon. Members who attended the earlier stages of the Measure will acquit me of any discourtesy in answering any of the points which were raised. I answered them to the best of my ability. It is clear that on the Amendment we ought to confine ourselves to what the Amendment says, which is that the extension should be for one year only. On earlier occasions the Government have been pressed by hon. and right hon. Gentlemen opposite to make a longer extension, and the hon. Gentleman is the only one who has suggested making it shorter. If the hon. Gentleman asked for figures, I could have given them to him when they were germane in the earlier debate.

Mr. Lever: I did ask for them.

Mr. Strauss: I cannot give the hon. Member any later figures than are contained in the last Annual Report of the Corporation. When he asks what the cost will be, he must be well aware that the great bulk of the money which it is likely that we shall not recover was lost in the very early stages of the Corporation's life.
It would not be right, nor, I believe would it be in order, now to deal with anything except what the very limited Amendment says. Having regard to the arguments used by my right hon. Friend and myself and by the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) and others on Second Reading, I ask both sides of the Committee to say that the period of one year would be in-

sufficient if the Bill is to achieve the purpose which the House approved on Second Reading.

Mr. Hale: I did not desire to intervene in the debate because I know very little about films. However, I have had some little experience of Parliament and I must say that the answer by the Parliamentary Secretary has been profoundly unsatisfactory to the Committee. I do not want to accuse the Parliamentary Secretary of discourtesy, because he is always a very courteous and approachable man, but I felt that he was showing a little lack of co-operation with the Committee in that answer.
Let us consider what he had to say. He was asked by my hon. Friend the Member for Cheetham (Mr. H. Lever) why he wants an extension for three years and what is going to be done during the three years. Surely, if the Government are asking for an extension of three years, we ought to know for what purpose the three-year period is required and the nature, scope and ambit of the operations contemplated during that period.
That is at least one very good reason against the Amendment of my hon. Friend, and that is that we might have to face the prospect of listening to a speech lasting two hours and 55 minutes from him once a year for three years, which would be a little more than I should be prepared to endure.
In reply to my hon. Friend's question, the Parliamentary Secretary said he had two reasons. He said that the first reason was that one year would be no good. I have before me the Annual Report of the National Film Finance Corporation. The last section of it is headed "The Last Lap." I rather thought it was a reference to some form of mixed musical chairs, but it appears to be talking about the projected termination of its operations. It says:
The Corporation has now started the last year of its active life; the Act does not permit loans to be made after 8th March, 1954.
So we are in the position that the Corporation had only a year to go and that it had to endure whatever disadvantages are attached to the fact that it had only a year in which to operate.
My hon. Friend is suggesting that the Corporation should have another year in precisely the same circumstances and conditions. But my hon. Friend went


further. He said, "If you will give us some reasons why the period of a year will not do and why you consider that the Commission should be allowed to operate for three years, we might well consider it."
The second reason given by the Parliamentary Secretary was worse than the first. He said that all the hon. Members who spoke in the Second Reading debate, with the exception of my hon. Friend the Member for Cheetham, seemed to think that, on the whole, the Bill was all right. I did not gather that impression. I would call attention to the fact that at least 618 hon. Members did not take part at all in the Second Reading debate, and as no vote was taken, there was no means of assessing what their views were. In any event, the Committee stage of a Bill is precisely for the purpose of detailed discussion of the matters we are now discussing which, although they are certainly in order now, would probably have been wholly inappropriate on Second Reading.
We now come to the main point of the matter, and the position is that at the moment there is a limit of £6 million on advances to be made by the Board of Trade to the Corporation and by the Corporation to the producing companies. That figure continues in the Bill. According to the last balance sheet, which is up to 31st March, 1953, £5½ million of that amount was out and. therefore, the Board of Trade is prohibited by the terms of the Act from advancing more than about £500,000.

Mr. Lever: Some of the money revolves.

Mr. Hale: I know that it revolves. I know that some money is coming in and some is going out. That is exactly what I am arguing.

Mr. Harold Wilson: It might help the argument of my hon. Friend the Member for Oldham, West (Mr. Hale), and his understanding of the complicated finances of the Corporation, if I reminded him that the Act passed by the House more than a year ago gave the Corporation special borrowing powers to raise £2 million other than by borrowing from the Treasury. There is Treasury guarantee for that, but to that extent it is possible for the Corporation to lend up to £8 million at any one time, allowing for revolving credits.

Mr. Hale: I am obliged to my right hon. Friend. I was coming to that. The first part of my argument was based on the figures of the Corporation, and on those figures the borrowing from the Board of Trade was limited to £6 million, and that is continued by the Bill. We shall now have a second Act. So far as I know, details of the operation of the first Act have never been made available to the House. I have tried to discover whether any operations have taken place. I do not know whether any operations have yet started or what has been done. In that respect we are discussing the Bill in a vacuum of knowledge.
Surely, in these circumstances, we are entitled to know what is the rough estimate of the turnover which is likely in the next 12 months. Will any money be left at the end of 12 months? Is there any point in having an extension for three years if insufficient money will be coming in? In order to consider that, we come to the vital point raised by my hon. Friend. We had hints on Second Reading—indeed they were more than hints—that there is a good deal more to be written off. We were told, as I understand it, that the main £3 million debt of British Lion is one of doubtful value. I listened very attentively to the Second Reading speeches, and I certainly understood that that was virtually what was being said. If so, what are the operations to be? What is to be their nature? How long will they take?

Mr. Lever: What is the extension for?

Mr. Hale: Yes, what is the extension for? The operations of the National Film Finance Corporation were to come to an end in March, 1954. As my hon. Friend said, it was always represented as a temporary Measure. It must be fair to say—my right hon. Friend the Member for Huyton (Mr. H. Wilson) will probably agree—that it was presented clearly as a temporary Measure. It was presented as a life-saving operation for an important industry. It was said, "We are going to lose some money on this, but it is worth doing so at least once. We cannot have the industry closing down."
What is the policy of the Government? Are the Government going to say, "If you give us three years now, we shall never come back for any more"? Are


the Government saying to the House. "In our view three years will be enough. At that time we shall not come and ask you for any more money or time"? I was going to speak about the industry having had a "shot in the arm," but a five- or six-year shot in the arm is rather a heavy dose of drugs to apply to anybody. Is that what the Government are saying? The Parliamentary Secretary has no information to give. Do the Government think that there will be some money left at the end of three years? Again, the Parliamentary Secretary has no information to give.

Mr. H. Strauss: The hon. Gentleman is generally very fair to me, I admit, but he has omitted entirely the fact that I said that I did not propose to repeat what was said by the Minister on Second Reading. The case and the policy were deployed by my right hon. Friend, and he also gave the reasons why what had been said originally by the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) about the sufficiency of five years had been proved inaccurate. I assure the hon. Gentleman that I said what I did not through any lack of courtesy but merely because it is the healthy custom of the House not to repeat on a limited Amendment something which was germane to and was dealt with on Second Reading.

Mr. Hale: I listened carefully to the debate on Second Reading, but it was not made clear to me, and my hon. Friend indicated that it had not been made clear to him. I think that the Parliamentary Secretary, who is now trying to be courteous—and we all appreciate that—might intervene and say what the policy is. Is it a temporary policy or is it a permanent policy? Do the Government expect to renew it? Do they think there will be enough repayments coming in? Does the hon. Gentleman think that the £3 million to British Lion and the £2½ million to other people will bring substantial recoupment, or do they hope that financing these operations with money coming in and money going out will enable this Corporation to last for some years to come?

Mr. Strauss: My right hon. Friend explained quite clearly, in his speech in introducing this Measure, that it extended the lending powers for three years, and he gave reasons for it. He also pointed

out that it did not extend at all the figure which they were empowered to borrow, and the hon. Gentleman can make his own deductions from that. We believe that it is right to commend the extension of these powers for three years, and that it is also right not to ask to extend the figure laid down in the existing Statutes.

Mr. Hale: I frequently find myself in some obscurity when the hon. Gentleman tells me to perform the duties of a ferret, but here I have also been asked to adopt the mantle of Sherlock Holmes.
It is clear that the Bill seeks to extend these powers for three years, and I will try to put my comments in the terminology in which Holmes himself would have put them. He would not have said. "This is elementary, my dear Watson." He would have said, "There are a large number of deductions to be drawn here, ex hypothesi, and no particular one giving a greater reason for it than another." He would have said, "We have been told that, if we listen with care, we shall come to the conclusion that all things are possible," but he would also have said that inadequate care had been taken to check up the finances of the Corporation, that inadequate time had been spent on finding the realisable value of the Corporation, and that the Government had therefore brought in a Measure which will continue things for the time being while they hope that something else will turn up, which is language more appropriate to Micawber than either Watson or Holmes.
The second thing he would have said is that the Government are afraid to come to the Committee tonight and ask for this permanent authority, and that they have shoved in three years as being the most which the Committee would stand for, and hope for the best, perhaps also hoping that the climate of political opinion may have altered before they have to come again.
The third hypothesis, which appears on the whole to be the most probable of the three hypotheses, is that the Government do not know, that nobody has thought about it, and that the Parliamentary draftsmen who drafted the Bill bunged in a provisional figure. I deduce that from the strange conduct of the Parliamentary Secretary in the early evening, unlike the strange conduct of the dog in the night time. It will be remembered


that the strange conduct of the dog in the night time was that it did not bark, and the strange conduct of the watch-dog of the Board of Trade is that, whatever he says or however he says it, he conveys very little information.
These are some of the points which come up for consideration now, and that is why I feel that we are a little unnecessarily prolonging the debate if we are always talking without information, without an assurance and without understanding clearly what the policy of the Government is upon this matter.

Mr. H. Lever: I feel that the debate could come to an end if we could get the answer to which we are entitled. Could the Parliamentary Secretary, since he merely refers in vague terms to the Second Reading debate, tell us in which particular column we might find these indications of the Government's intentions?

Amendment negatived.

Motion made, and Question proposed, "That the Clause stand part of the Bill."—[Mr. H. Strauss.]

8.15 p.m.

Mr. H. Lever: I am not going to invite a kind of blank-wall reply by giving the impression that the time of the Committee will be saved, because we insist on having a reply, and this necessity has been forced upon us by the Government, because no one need imagine that my objections to this Bill are purely obstructive.
I am unable as a Member of the Committee, to vote for the continuation of the Finance Corporation until the Government tell me how much it is likely to cost. I think it is the grossest effrontery on the part of the Government to come to the House and ask for the continuation of this Finance Corporation for three more years when they do not tell us whether it will cost 6d. or £6 million. I think this is the greatest outrage that I have heard since I have been in the House. I am not going to mince my words, because I have asked these questions patiently on Second Reading and again in moving my Amendment, and I have been unable to get a reply.
The Minister knows perfectly well that this is the grossest insolence shown to the

House in the eight years since the war. He asks the Committee to vote for the Finance Corporation to continue for three more years, and, though three times pressed to do so, he refuses to tell the Committee or give any kind of estimate how much it will cost. He wants a blank cheque; well, he will not get one from me without protest in the most bitter terms.
The Minister and the Government only show this insolence because the two Front Benches are in some sort of general agreement. I am not blaming my right hon. Friends in the matter, but the Government feel that there is no opposition. Every time I ask questions, the Minister says," Everybody is in favour of it except you." I think that is gross insolence, and I want him to understand that the right of a Member of Parliament to speak his mind where public money is concerned is not in the gift of any political party or Front Bench. I think it is a monstrous outrage that he refuses to answer these questions, and the only deduction I can make of the reason for his refusal to answer is that he thinks he will get the Clause in any case.
Will he tell the Committee what he estimates this will cost? Will he say what it cost over the last five years? He knows perfectly well that on Second Reading, when I asked him whether he would tell the House the actual cost of the Corporation in the last five years before asking the House to extend it for another three years, he referred me to the out-of-date balance sheet shown in the Corporation's report. I ask for the real cost over the last five years, but the Minister sits there and tells me, who, however insignificant and however contumacious, am a Member of this House, "Well, you are the only Member of the House who objects to the Bill any way, and I do not want to give you an answer."

The Deputy-Chairman: I do not want to interfere with the hon. Member expressing his views at all, but I am concerned about his repeating the same arguments.

Mr. Lever: It must be understandable to anybody who understands elementary logic that it is difficult to keep one's indignation within bounds. I think that, if the Minister does not give me these


figures in this House, he should be facing impeachment in Westminster Hall. I want to protest in the most forcible terms, not because I think the Minister has been discourteous to me personally, because he is not a discourteous or unapproachable man, but because I think he and the Government are showing complete contempt for the House in asking us to rubber-stamp this Measure—because that is what it is—while refusing to tell the Committee what is the cost and what is the policy.
It is to me most astonishing that any hon. Member of this Committee can conscientiously vote upon this question as to whether or not we should keep the Corporation in being for another three years without knowing what the powers of the Corporation are. I asked the Parliamentary Secretary on Second Reading and I asked him on my Amendment a moment ago, and I still have not had an answer. What are the powers that he is asking should be kept in being for three years?
If the Corporation had evil powers, for example, we might not want to keep it in being for three years or even for three minutes. It is surely relevant, when the Committee is deciding whether to make an extension of the principal Act for another three years, to ask what the powers are that the Committee is asked to extend for another three years. Are they powers to lend money knowing we are going to lose it?

The Deputy-Chairman: The hon. Member is really repeating his argument indefinitely, and I must warn him at this stage that if he continues to do so I shall have to ask him to resume his seat.

Mr. Lever: It is the first time I have made this argument on the Question, "That the Clause stand part of the Bill." I made it on my Amendment but I got no satisfactory answer. The fact that I made it then does not debar me from making it now on this Question. This is the first time I have done it on this Question, as will be seen from the OFFICIAL REPORT.
We are entitled to know what the policy of the Corporation is before we extend these provisions for another three years. I asked these questions on Second Reading. The Parliamentary Secretary said a moment ago that if I had asked

these things at the appropriate time he would have given me an answer. It is not true. I did ask these things on Second Reading. I sent the Parliamentary Secretary a written list of the questions in advance so that he would not be able to claim that I had sprung them on him by surprise. Besides, I did not want to be discourteous to him in the matter.
I want to know the answers to these questions, and I do not think we can be asked to extend the original Act and the powers of the Corporation for three years until we know what the policy is. Surely it is elementary that before we extend these provisions for another three years we should know whether this business is to be run in the future as it has been in the past? Or perhaps we are being asked to make the extension for another three years in the belief that it is to be wound up at the end. That is one thing. We could extend it, perhaps, for another three years if we knew that at the end that was to be the case.

The Deputy-Chairman: The hon. Member is now discussing the point of his Amendment that has been disposed of. We are now on the Question, "That the Clause stand part of the Bill."

Mr. Lever: I beg pardon if I have strayed from the rules of order, but we are entitled to know exactly what it is for which the Government ask, which is what we shall vote upon in a moment. We have not had a sufficient explanation of the reasons for the three years' extension of the principal Act, and we are entitled to that. I asked the Parliamentary Secretary, but nobody told us, on Second Reading. Nobody has told me on my Amendment, and I am asking the Parliamentary Secretary again on this Question. I give him a chance to redeem himself and tell the Committe why it is that he asks for a three years' extension of the powers under the principal Act. Is it not elementary that he must tell us?
It will not do to say that I have not read the Ministerial speeches on Second Reading properly, or that if I had, and if I had considered the matter carefully, and realised the unanimity on all sides, I should know why quite well. I do not know why. I want to know why. I asked the Parliamentary Secretary before, and I ask him again for a third time—


why does he want these three years? Is this the time to formulate policy? Is it the intention at the end of the three years to wind the thing up? We want to know what the intention is. What is the purpose and what is the intention of this extension? Those are questions to which, surely, the Committee must have an answer before it can be asked to vote on this matter with a full knowledge of the facts.

Mr. T. O'Brien: Constituency obligations prevented my attendance at the marathon of my hon. Friend the Member for Cheetham (Mr. H. Lever) on the occasion of the Second Reading. I spoke on Second Reading following my right hon. Friend the Member for Huyton (Mr. H. Wilson), who himself has had very wide experience of the film industry. I commended the review made of the position of the British film industry by the President of the Board of Trade. I was at a loss to understand when I got to Nottingham and read the evening papers the unexpected development in the action of my hon. Friend.
I do feel that my hon. Friend, whom I have certainly heard tonight, has strayed very much from the real issue involved. He is entitled to his opinion and to the right of a Member of this Committee to express his view in this Committee. That has been the subject at all times of revolutions and rebellions and what not in the course of our illustrious history. I do not think there is anything in the Bill that could be remotely interpreted as denying a Member the right to express his opinion on any matter, let alone the matter of this Bill.

Mr. H. Lever: I was not complaining that I had not had the fullest right to express my opinion. Indeed, the House was extremely indulgent to me. I was complaining that we had not had the benefit of the information, without which the Committee cannot possibly make up its mind on this matter.

The Deputy-Chairman: This has nothing to do with Clause standing part.

Mr. O'Brien: I am trying to address myself to that. With certain reservations, not very important reservations, reservations that were dealt with on Second

Reading and which will probably be dealt with on the next Clause and probably on Third Reading, the film industry, and I mean all sides of the film industry, are very satisfied that the Government have decided to extend the powers of the Corporation. Here I share my right hon. Friend's view that, irrespective of the fact that it is a Conservative Government, we are very pleased in the British film industry that the Government are prolonging the life of the Corporation by three years.

Mr. H. Lever: A gift from Santa Claus.

Mr. O'Brien: It is not a question of Santa Claus. If £6 million in six years is a gift from Santa Claus, I think we ought to disbelieve there is a Santa Claus. I mentioned on Second Reading that the Treasury took nearly £40 million in Entertainments Duty every year. If the Government's return by way of loans to the British film industry of £6 million out of the revenue of £40 million which they get from the industry each year is a gift from Santa Claus, all I can say is that my idea of Santa Claus is very different from my hon. Friend's.
Let us get down to this Clause. I, on behalf of every single worker of all kinds in this industry, support the Clause. That goes for members of organisations I do not directly represent on the trade union side, but as the representative of the largest trade union, not only on the production side but on the distribution and exhibition sides, I say that we whole heartedly support this Clause as a necessity to continue the life of the Corporation. We know why the Corporation is in existence; that has been adequately explained in the House and in Committee on more than one occasion. But to exaggerate the situation in the way in which my hon. Friend has exaggerated it, is rendering a disservice to the industry without fulfilling any national service.

8.30 p.m.

I shall have something to say very briefly on the next Clause when I intend to try to address questions to the Minister in charge of the Bill. No doubt my right hon. Friend the Member Huyton (Mr. H. Wilson) will do the same. The one short point which should be digested by the Committee is that unless this Corporation continues for another three years there will be a serious risk of British film pro-


duction coming to an end. Although it has been reported by the President of the Board of Trade that the Eady fund scheme has been approved by the trade associations, we are not yet out of the wood in that respect. Difficulties will probably arise in the spring, and they may be of such a character as to endanger the continuation of the Eady Levy unless legislation is introduced—and that would probably exacerbate the situation.

Notice taken that 40 Members were not present;

House counted, and, 40 Members being present—

Mr. O'Brien: I hope the hon. Members now leaving the Chamber will not go too far away. I was saying that, with the difficulties which might well lie before the industry next spring in connection with the Eady Levy agreement, which has so far been arranged with the President of the Board of Trade and which will require implementation, if the Corporation goes out of existence at this period it will be a very serious matter indeed for the industry. The British cinema-going public would not like anything to happen at present which would place in jeopardy the continued existence of the British film industry. We produce very good films and, like other countries, we produce bad ones; but we have to take the good with the bad and to maintain our high skill and our prestige.
I am not here to argue that the Corporation should continue merely on the ground that it gives employment to technicians, artisans, craftsmen, artists and actors. That would be rather a negative submission. It is true that the Corporation has maintained a high standard of employment among all our skilled grades, our artistic grades and our writers, but what matters even more is the fact that Britain's position in the world today, challenged as it is even by our friends as well as by our enemies, requires a virile, vigorous, efficient British film industry so that we can portray to the world something of our own way of life and something of the skill of our technicians and actors.
I am sorry that on Second Reading the House took such an irresponsible view of its duties in this matter, and I am sorry that my hon. Friend did not have regard to many of the arguments which were

advanced during the debate by other speakers.

The Deputy-Chairman: The hon. Member must not stray too far into the Second Reading debate but must confine himself to the Question, "That the Clause stand part of the Bill."

Mr. O'Brien: Your rebuke, Mr. Hopkin Morris, has been shared by many others in recent months on the subject of straying too far from the agenda. I will endeavour to keep myself to the Question. Let me say, before we conclude this discussion on Clause 1, that we are satisfied that this Corporation must exist, but we are not satisfied that it must be given a blank cheque.
In my Second Reading speech, I mentioned that I had certain misgivings with regard to the facilities outlined in Clause 2 of the Bill. Nevertheless, I am not going to take that point to such an extent as to challenge the continuation of the Corporation or to suggest that there is anything fundamentally wrong in regard to the work done up to now by the Film Finance Corporation. After all, the Bill does not extend the financial liabilities of the Crown. The Bill merely is restricted to continuing the Corporation at its previous scope of £6 million, with £2 million which it can raise from other than Government sources.
In passing, may I say with great respect to my hon. Friend the Member for Cheetham—and it is a coincidence that one hon. Friend seems to have the same alphabetical terminology of his constituency as another hon. Member—that I deplore the remarks made by the Member for Cheadle (Mr. Shepherd) in his very blunt, and, I think, unfair reference to Sir Alexander Korda, because some of us are aware of the strain and difficulties through which he has passed.

The Deputy-Chairman: This has nothing to do with the Clause.

Mr. O'Brien: I think it has. I do not wish to engage myself in conflict with you, Mr. Hopkin Morris, but I believe that the continuation of the Corporation has reference to its past history, because my hon. Friend the Member for Cheetham has been arguing that he has not got any information from the Government. I feel that unless such information


as he required is forthcoming, it was not fair that the hon. Member for Cheadle should have engaged himself in the vituperation which he did no Second Reading.
I commend Clause 1 to the House. I feel that this matter has been adequately ventilated, and I tell the Committee, as I will tell the House on the Third Reading, that this Corporation should be allowed, with the proper supervision that it should have and is getting, to continue its work for the next three years to promote the interests of the British film industry.

Mr. H. Wilson: I would not have intervened at this stage of the Committee proceedings had it not been for the substantial number of questions which my hon. Friend the Member for Cheetham (Mr. H. Lever) had put to the Government and the very sketchy answers that we have had from the Government Front Bench to most of those questions.
I say right away that I acquit the Parliamentary Secretary, as others have done, of any discourtesy in this matter. I am quite sure that the only reason that he has not answered the questions is not in any sense discourtesy—he would be the last man guilty of that—but simply that he does not know the answers. It is not for anyone on this side of the Committee to attempt to replace the duty of the Government and to give such answers as can be given from our perhaps limited knowledge to my hon. Friend, but I think that there is one question he put to which he is certainly entitled to an answer, and which the hon. Gentleman has not so far seen fit to give him.
That was my hon. Friend's question about the Government's ultimate intentions concerning the future of the National Film Finance Corporation. Personally, I disagree with my hon. Friend in his view that this should be extended for only one year. It is only right that I should remind him that there has been no sudden change of front as compared with the time when I introduced the original Bill in the House, and that I said myself from the Box opposite that I had been convinced that it would be necessary for the National Film Finance Corporation to be retained in some form or another as a permanent part of the industry's structure.

Mr. H. Lever: In the right form.

Mr. Wilson: Certainly. I think that the hon. and learned Gentleman ought really to tell the Committee tonight whether he agrees with that view which I formed after long and, as my hon. Friend the Member for Nottingham, North-West (Mr. O'Brien) quite fairly said, close study of the problems of the industry. That was my view. It would help the Committee in its attitude to the Question, "That the Clause stand part of the Bill," if the hon. and learned Gentleman were to say whether he thinks that the Corporation should in some form or other be made permanent.
We on this side have been in some difficulty in that we have not had a very full reply to some of the questions that have been raised. I do not think anyone could have done more than the President of the Board of Trade in his opening speech, considering the time he thought right to give to it. I do not quarrel with that; I think it was the right length. He gave us full information about his reasons for commending the Bill to the House and he gave a lot of detailed information about the finances of the Corporation. There were, however, a number of important questions that some of my hon. Friends and I felt it right to put, and these questions have been answered very sketchily, if at all.
I do not want to have to remind the Parliamentary Secretary of the questions which I put about the problem of circuit showings or to go into that matter in detail, because it would be wide of the Clause. The hon. and learned Gentleman has made it clear that he did not pursue with anything like sufficient speed his researches into the answer to that very relevant problem. My hon. Friend has put a number of other questions, and I can only judge from the failure of the Government to answer our very relevant questions on the Clause that the Minister has not pursued them sufficiently actively.
I assure my hon. Friend the Member for Cheetham that there has certainly been no collusion between the two Front Benches on the Bill. Any suggestion that there is an under-cover or under-the-counter coalition, or a coalition over the Table or anything like that, in respect of the Bill, would be wrong.

Mr. H. Lever: I never suggested that.

Mr. Wilson: I am sure my hon. Friend did not suggest it. It was in case there had been any misunderstanding from what he said that I wanted to reassure him that there has been no collusion about the Bill. My reason for supporting it on Second Reading—I gave my reasons very fully—was not because there had been any collusion, but because the Bill carries on a job of work which I started and which, before I left the Department, I felt was assential to the future of the industry.
I apologise for trying to answer my hon. Friend's questions, but an attempted answer from me is better than none, and we do not look like getting a reply from the Government.

Mr. Lever: Obviously, they are not qualified to reply.

Mr. Wilson: My hon. Friend asked what had been the cost of the Bill. If my tentative answers are not accepted by the Government, I hope they will correct me and give the right answers. My view is that the cost of operation of the Corporation over the last five years—and the Clause seeks to extend it for a further three years—must be measured in heavy negative terms. The cost has been minus several million pounds. In other words, the gain has been several millions to the national Exchequer.
The fact that we were able to keep film production going as a result of the loans has meant millions flowing into the Treasury in Entertainments Duty that would never otherwise have come into the Treasury. To that extent, the million or two that has been already written off is very small compared with the gains to the Treasury that have resulted from the original Act. Second, in terms of dollars and of bargaining power with the American film industry, I believe that the effects of the Act have been immeasurable. They have been worth many millions of dollars to us. That must be the view of the Government or they would not have come along with this plan to continue the Corporation.
I agree with my hon. Friend that we ought to have been told a bit more about the Government's present film policy so that the three years' continuance of the Corporation will be effective. The party

opposite have inherited from us a number of improvements in the film industry which have changed the background of film financing compared with the time when the original Bill was introduced. In particular, the levy on cinema seats for the purpose of the Film Production Fund has made a big difference to the finances of the industry. We would like to know more about the Government's intentions about future film policy. So far, we have not been told.
I warn the Government that, although I support the Bill, it will not of itself solve the problems of the industry or do anything on a major scale towards doing so. I believe that the Bill is a necessary condition of solving the industry's problems, but it will not of itself solve them.
We shall in a few months debate other aspects of the financing of the film industry which it would be quite out of order for me to mention at this stage, but I wanted to make clear that the Parliamentary Secretary has not given any answer to the relevant questions put to him, and since he is not going to give the answers—probably because he does not know them—I thought it only right to satisfy some of my hon. Friends by telling them why we should support this Bill and, in doing so, attempt to reply to some of their points.

8.45 p.m.

Mr. Hale: My hon. Friend the Member for Nottingham, North-West (Mr. O'Brien), with his customary courtesy, began his speech by saying that he thought the matter had been ventilated enough, but this was an invitation which I could not accept in the way that I normally accept invitations from him from time to time. I am not a member of his union. I would be very happy if I were, but I rarely go to see a film. I have seen about two in the last 12 months, and I do not know Sir Michael Balcon, and I have little knowledge of what he does. I am not the least concerned about the different rôles in the film industry, because I have a full-time job looking after my own rôles and have no time to worry about anyone else's.
Regarding the rather fulsome compliments paid by my hon. Friend the Member for Nottingham, North-West, I should like to say that it is a happy situation in which he finds himself, and I do not


dissent from what he said. But, speaking as one of the Members for Oldham, if a Bill were introduced giving to the cotton industry £30 or £40 million without supervision, I should feel very happy. I should be able to say that the cotton operatives took no objection to the scheme, that the cotton spinners were enthusiastic for it, and that the whole thing from that point of view was a most satisfactory arrangement.
There is only one person to whom I feel I owe something because I happen to represent him, and that is the taxpayer. I feel that this is a moment when we are entitled, on behalf of the taxpayers, before we renew this Bill, which has now been running for five years, to inquire into its working and its usefulness. It was all very well for my right hon. Friend the Member for Huyton (Mr. H. Wilson) five years ago to come along and say, "Here is an industry in a grave condition. Let us put a shot in its arm and see how it works." But it is not right five years later to tell the Committee, as the Parliamentary Secretary did, that the Government do not know how the scheme is working. The Committee is entitled to know, and we ought to be told a little more about some of the measures that are going to be taken in the future to secure two things that are vital.
The two things which are vital are these. First of all, we must see that money is not unnecessarily lost. I should have thought that that at least would be acceptable to both sides of the Committee. The second thing is, if any money is lost, then let it be lost in ventures which are really worth while, which will assist the industry, provide employment, keep the cinemas open and are an addition to the general values of the country and to the entertainment industry. I do not think that in any of our recent debates on this matter we have been given any details of how the scheme works. No one has told us who looks after these finances or how it is done.

Mr. O'Brien: On a point of order. My hon. Friend should read the recent Report of the National Film Finance Corporation and the previous Reports, because they give as much information as any other documents available which deal with Government expenditure.

Mr. Hale: It is always a matter of deep reluctance to me when I am compelled, because of an intervention, to call attention to the shortcomings of one of my hon. Friends. My hon. Friend the Member for Nottingham, North-West pointed out in the Second Reading debate that he had to leave rather early, but obviously he did not come into this debate until rather late or else he would have heard me speaking at length on these Reports.

The Chairman (Sir Charles MacAndrew): The hon. Member for Oldham, West (Mr. Hale) was so quick in answering the hon. Member for Nottingham, North-West (Mr. O'Brien) that I was unable to reply to the hon. Gentleman's point of order. I would point out to him now that Clause 1 deals only with the extension of time.

Mr. Hale: But it is the operative Clause of the Bill, and if Clause 1 goes the whole Bill goes. It does not merely extend the time. It extends the use of £6 million of public money for three years. What is more, it provides that, if necessary, the whole lot can be lost. Surely, therefore, I am well within the terms of relevance in saying that before we pass Clause 1 we should make several inquiries to ensure that it is not lost recklessly or without a precaution or safeguard. Quite clearly, Sir Charles, I want to limit myself to this Clause.
How are these things financed? My hon. Friend said, "Read the Report." The Report tells us nothing. Where can he find that 100 per cent. or 60 per cent. is lent on a film? I will give way to my hon. Friend if he will tell me, because I want that question answered. From my limited experience of the film industry in years gone by I remember the methods that operated before the last war. A separate limited company was formed for each film, and I suspect and believe that the same thing is done now. That is a practice which is obviously open to objection. It starts the whole process of "Heads I win, tails you lose" or at least, "Heads I win, tails I do not lose." If the film pays, a bonus is declared and the company starts up again. The moment there is a loss, the company goes to the people who finance it, whether it is the Film Finance Corporation or others.
The method before the war was rather more elaborate. A number of people got


together who had nothing in common except that none of them had any money. They were men of ideas, men of ambition, men of fertile and active minds. Perhaps one of them had written a scenario or one had written a book and another had turned it into a scenario. Then there was a continuity girl who was working part-time as a typist but who was quite willing to become a continuity girl also. Then there was a producer who in those days could be hired on a Kathleen Mavourneen system of payment—it may be for years, or it may be for ever. All these gathered together and formed a little company, and then they went into the city.

The Chairman: That does not arise on Clause 1.

Mr. Hale: I assure you, Sir Charles, everybody knows how this was done.

Mr. William Keenan: My hon. Friend would make a good script writer himself.

Mr. Hale: That, as I understand it, is how it continued to be done until this money was found. Now, of course, they do not have to worry about money. In a speech on another matter this afternoon my hon. Friend the Member for Nottingham, South (Mr. Norman Smith) was talking about the people in the city as though they were rooks. They are not rooks but gulls. The film people used to borrow money from the bankers, but they dried up. Then they went to the insurance companies and the insurance companies were nearly broke. Then they went to the people in the city. There was nearly always a syndicate in the city who would like to lend on a film.
How is it done now? As I understand the method, a little limited company is formed for each film just the same. That leads to one or two considerations because, as I understand it, there is no need to have any money now. The Film Finance Corporation have been lending up to 100 per cent., I believe, though I am open to correction.

Mr. H. Lever: The Government do not know, and they would not tell if they did.

Mr. Glenvil Hall: It is not true.

Mr. Hale: This is the situation, and my right hon. Friend the Member for

Nelson and Colne who used to be Financial Secretary to the Treasury, says it is not true, but he has had no intimate experience of that for two years—

Mr. H. Wilson: Does not my hon. Friend mean the right hon. Gentleman the Member for Colne Valley (Mr. Glenvil Hall)?

Mr. Hale: Yes—I will not embark on arguing whether I have made an improvement or not, but certainly it would have been a change. However, we get no answer from the other side of the Committee. Now, Sir Charles, the next thing which is dealt with to some extent in the Report is whether the money is spent with wisdom. We find in the Report a stream of statistics showing the amount of showing time per—

The Chairman: I hope that the hon. Member will confine himself to the Question, "That the Clause stand part of the Bill." He is going quite beyond what we are now discussing.

Mr. Hale: I am always most reluctant to argue with the Chair, and particularly with you, Sir Charles, but I ask you to consider this seriously. Here is a short Bill of two Clauses which provides that £5½ million now owing to the Board of Trade shall be made available for another three years to be invested in the film industry on terms that are not in the Bill. Surely on the Question, "That the Clause stand part of the Bill" we are entitled to ask what safeguards there are. I submit with respect that the point to which I am addressing myself is relevant. It is—if £100,000 are loaned for a film, and it is very often much more than that, what are the terms of the agreement? Do those concerned enter into a contract, as builders or contractors do, to produce a film in a number of days and lose money if they fail to keep the contract?

Mr. O'Brien: Not in a number of days, but they enter into a contract with the Corporation. One cannot make a film in a manner similar to building a house.

Mr. H. Lever: Is it in order for the Committee discussion to continue with the Government refusing all information to the Committee and hon. Members having to rely upon my right hon. Friend the Member for Huyton (Mr. H. Wilson), my right hon. Friend the Member for


Colne Valley (Mr. Glenvil Hall) and my hon. Friend the Member for Nottingham, North-West (Mr. O'Brien)? Surely the Government ought to be giving the House this information.

Mr. Hale: I am grateful for any assistance, but I shall try to remember where I was when I was interrupted by my hon. Friend the Member for Cheetham (Mr. H. Lever). This is a very serious point. The Minister is saying, "Give us power to say to the National Film Finance Corporation, 'You can lend money for this, that or the other film.' "But before we pass this Clause I ask on what terms the money is to be advanced, what security is given, what undertakings are asked for and what provisions are made against the reckless spending of the money. I am the last person to try to retail gossip on affairs of this kind, but it is common knowledge among hon. Members that allegations are made in the Press of money being wasted, probably quite unjustly. But at least the Minister can tell us what safeguards he proposes. His answer should clear up that matter and relieve us of anxiety.
I only went once to see a film in production. I went to see at Elstree the production of the opera "La Bohème,"and with that tremendous facility for altering the names of well-known pieces, this was re-christened by the film industry as "Mimi." The National Film Finance Corporation's Report claims at least that there has been a modest advance in film production time per day during the operations of the Corporation, and to that extent its safeguards may be beneficial. But even now it does not claim that on every day two minutes of film time are produced in a day.
When I was at Elstree they were on the set for hours while a little scene in which the gondolier appeared on the river was filmed. The only words to be spoken were the words by the gondolier, "Now we can go and buy the brooch." The doors were shut, filming commenced and everybody was told to keep absolutely quiet, an experience which I found rather trying, though relieved for me by the sight of a bevy of beauties standing on the Rialto Bridge. We were exhorted to remain still while the gondolier's boat was moved, but when the moment came, there was deathly silence on the set. The

gondolier had forgotten his words. Things were said then that I had not heard since the day I left the Army. The gondolier had to be moved from one part of the river scene to the other, and the cameras had to be moved round in this and that direction and the whole thing had to be taken again. Is there any improvement on that? Is this sort of thing needed? Is there anything by which we can ensure that the money is spent with care?

9.0 p.m.

Finally, I want to deal with a matter which is quite important. Those of us who have any knowledge of the structure of limited companies know the infinite possibilities for adjustment which are there. If we lend £100,000 on a British film and get a report from the Film Finance Corporation saying, "We are very sorry, we have lost this money," we investigate the whole thing and come to the conclusion that the whole of the £100,000 is irrecoverable and in the end—assuming that a later Amendment is accepted—write it off, what happens after that? The contents of these cameras can be sold six months afterwards for export to France, Germany and Colonial Territories, very often for large sums. Is there any supervision to find out whether any attempt has been made to recoup the loss and whether films have not been sold after the loss has been reported?

That is Item No. 1, and Item No. 2 arises out of the remarks of my right hon. Friend. No one is attacking this provision. I have no objection whatever to the theory of lending public money to keep a great industry going. I often wish we had done it before. It is part of the elements of Socialism that we should consider that where necessary. I am rather surprised that these apostles of private enterprise are coming to suggest it, but that is another matter. Apparently private enterprise is only considered reputable when it is paying big dividends. My right hon Friend said that we got taxes in another way and what we gain on the swings is lost on the roundabouts, or vice versa. That is true and can be said of the motor industry and so on, but it does not absolve us from the duty of seeing whether the money is wisely spent.

This is the situation I envisage, and which does happen. A company is formed with a capital of £100. It pro-


duces a film at the cost of a quarter of a million pounds. It borrows a very large sum of money from the Film Finance Corporation and, when its operations are finally completed, reports a loss of £100,000. That loss is borne by the Film Fnance Corporation. That, one would think, is the end of the transaction. But we live in an able and ingenious world, and it has occurred to people in the City long since that a company which has lost £100,000 has a taxation value of £45,000. I only find these things out when I emerge into the criminal law for a time. There is a £45,000 value in a £100,000 loss. Any huge company can buy up that small company and set that loss against their operating costs and save 9s. in the £ on the lot.

What is done about that? I am not for a moment making any imputation whatever on the film industry as such. I am not for a moment suggesting that I have the slightest reason to think they are either more, or less, honest than any other industry. I do not suggest it for a moment, but I do not know these things happen. We have the authority of a very distinguished Lord Chief Justice that anyone who can save paying taxes is perhaps not performing a public duty, but that it is not a matter which should attract public reprobation.

It seems to me that when all these matters are taken into account, it is really deplorable for the Parliamentary Secretary or the right hon. Gentleman to maintain their attitude of saying "Look at the Second Reading debate. We said something about this. If you read something into it and do a certain amount of deduction, put two and two together, they make five and you come to the conclusion that the answer is six." That is really not the way to treat a Committee of this House. I suggest that we should press these questions, find the answers and what safeguards are being applied and how they are applied and what success they are making.

Mr. Keenan: I intervene because it seemed to be implied in some of the speeches I have heard that there are only two or three hon. Members really interested in this matter. I rise to support the demand—I think there is every justification for the request made—for more information because it is pretty obvious to anyone listening to what was

said in the debate on the Amendment and on the Question which we are now discussing that information is required and that there is every justification for the mounting criticism of my hon. Friend.
Had it not been for that criticism there would probably not have been given to the matter, even on this Motion, the attention which it has attracted; it would have gone through without any, or with little, notice being taken of it. I rise to support that criticism because it is justifiable, and to add my voice to the demand for the information which obviously should be available.
The criticism has been made that there should be some details about what is done with the money and some justification of the extension of the period. I remember that approximately five years ago it was felt that the film industry required support, but I take exception to what I have heard several times in the course of the justification of the claim for the grant—which is apparently what it is and not a loan—that the industry pays £40 million taxation a year and gets a rebate which it is suggested should be £5 million.
That is peculiar reasoning. I oppose extraordinary taxation on several things. If the pools paid in taxation a third of what they got and if they were to demand free postage, it would be on a par with this proposal. Candidly, I do not think that this proposal is justifiable. There may be a case for assisting any industry, even this industry, though I am not satisfied and never have been satisfied in this case, because it seems to be overlooked that a profit is made out of the industry, that it is not run just for entertainment's sake. Profits are at the end of it, and when we are considering the question of a loan to the industry, with the extension suggested, it seems to me that there are avenues that require closing so that what the hon. Member for Oldham, West (Mr. Hale) suggested might take place, and probably has, should not occur. For these reasons, I wish to add my voice to the voices of my hon. Friends, because there is a volume of opinion which, if Members were here, they would be prepared to ventilate—and it is the same opinion as that which I am expressing.

Mr. H. Strauss: The hon. Member for Cheetham (Mr. H. Lever) thought that if he repeated often enough that a great many relevant questions had been asked and not answered someone was, sooner or later, through the fact of his repeating it, likely to believe him. The fact is that if I did not answer on his previous Amendment a lot of questions that had been asked on Second Reading, it was either because they were irrelevant to that Amendment or because they had already been answered. One of the questions was what were the powers of the Corporation. The hon. Member was told that last time.

Mr. H. Lever: Mr. H. Lever rose—

Mr. Strauss: I am not going to give way at the moment.

Mr. Lever: I gave way to the hon. and learned Gentleman.

Mr. Strauss: Another question was, he said, if I remember correctly, about the cost. He brushed aside the obvious answer. He said, "I do not mean anything revealed in the annual report," as though that was perfectly valueless. But it is not perfectly valueless.
The right hon. Member for Huyton (Mr. H. Wilson), in what I thought was meant to be an outburst of generosity, said that no doubt I did not know the answers to any of the questions. I think that that is perhaps not quite worthy of him.
The hon. Member for Oldham, West (Mr. Hale) made some points which revealed a genuine interest in this matter. Let me say at once that the reply to him is contained in what he said himself—and quite rightly—that he hoped the money advanced by the Corporation was advanced on sensible terms and in an economic manner in order to do good to the industry. That, of course, is the idea. But having created the Corporation for that precise purpose, and having had experience of the work it is doing, we leave it to the Corporation to decide in individual cases the terms on which money is advanced rather than interfere ourselves.
As regards any money which may possibly be lost, that matter arises more on the next Clause than on this one, but I agree at once that the case for extending the powers of the Corporation is based on the idea that the Corporation is doing

a good and sensible job. The hon. Member for Cheetham suggested that I had denied some information about the cost of this Measure—

Mr. Lever: Yes.

Mr. Strauss: The question of cost arises on the next Clause. If the hon. Member will read paragraph 5 of the Explanatory and Financial Memorandum, he will know why I have not given an estimate. That arises on the next Clause and not on this one. If, in fairness to my right hon. Friend and myself, the Committee will bear in mind that we have stated the powers of the Corporation and the purpose for which we propose to prolong them, the only question, as the right hon. Gentleman the Member for Huyton said, which is left unanswered is why we have not declared whether we want them to go on for ever. We commended to the House on the last occasion, and to the Committee on this occasion, the terms of this Measure. The Corporation is doing a good job by providing capital which is at present needed by the industry and which will continue to be needed for the period mentioned.

Mr. Hale: Surely the hon. and learned Gentleman's answer and his argument about Clauses 1 and 2 is a little unreal. If I may use a metaphor from the matter we are discussing, if my wife and I wish to go to the pictures, we do not say that we will go along and that when we get there we will count our money and find out what is the price of the tickets, and then see whether we can afford it or not. We first go through our pockets—or at least my wife goes through my pockets—to find out whether there are enough resources in the family to enable us to go at all. That is what we are asking now. Can we afford it? Surely that is a relevant question, and something which we should decide before we are asked to vote for this three-year extension.

Mr. H. Lever: The Parliamentary Secretary is going too far. Not only does he fail to reply to a single one of my questions, but he has the cool effrontery to tell the Committee that I thought that if I went on repeating often enough that I had not got an answer, someone would believe me. I cannot see how the Committee can fail to believe me, because the Minister has not answered


one of the questions which I have put. They are all relevant and fundamental questions.
I want to know how much the Corporation has cost in the last five years—the actual cost in the estimates of the Board of Trade, not the book figures which are well out of date, and which in any case are not accurate except as book figures, as the Minister well knows. Has he answered that question? What is the actual cost to the State of the Film Finance Corporation over the last five years? Let him answer that question before he has the hardihood to ask us to vote to extend it for another three years.
I repeat for the fifth time—and this is a fundamental question—how can the Committee, in good conscience, vote for a three-year extension of the powers of the Film Finance Corporation when the Minister will not tell us what it has cost to have the privilege of such a Corporation for the past five years? It may be an expensive toy; it may be quite a cheap amusement for the Government to support.

9.15 p.m.

Mr. H. Strauss: I have told the hon. Member over and over again that the figures in the Annual Report of the Corporation are not, as he suggests, valueless.

Mr. Lever: Let us consider the debt of the British Lion Corporation. It stands at £2 million in the books. Is there a single person outside a lunatic asylum who would give £2 million for that debt? Is not the Bill brought into being precisely because that £2 million is practically worthless and cannot be recovered without some of the rigmarole which we shall discuss later? The last accounts of the Corporation are at least six or seven months out of date. I think they are to December, but the printed copy was dated April, if I remember rightly. The Committee is entitled to know the answer.
The second question is that we are asked to extend the life of the Corporation by three years. The least the Minister can do is to tell us what are the powers of this creature that we are to save from death next year, as it would automatically expire under the old Act. I asked him what are the powers of the

Corporation. Has he answered that? Certainly not.

Mr. Beresford Craddock: Again and again.

Mr. Lever: All he said on Second Reading was, "Read the Act." That was obliging. When he asked us to extend the life of the Corporation for a further three years, I asked whether it was lawful for the Corporation to lend money expecting to lose it. There would be a big difference if the Government asked us to extend these powers for three years and they honestly believed that it was unlikely that the Corporation would lose money because they were lending it with the honest expectation of getting it back.
I asked the Minister on Second Reading, during the discussion on the Amendment, and again a few minutes ago, whether it is the policy of the Corporation to lend money expecting to get it back; or is it the deliberate policy of the Corporation to lend money knowing that it may not, and probably will not, get it back? I ask the hon. and learned Gentleman whether it is lawful to lend it otherwise than in the honest expectation of getting it back, and the Minister replies telling me to look at the Act. It is an impertinence to describe that as an answer. Do the Government regard this creature as having power to lend money for artistic and cultural reasons in the world-wide struggle for prestige—that is one thing—or is it the policy that it should lend money not expecting to get it back? Are the Government asking us to keep this creature in being for another three years in the belief that it will recover what it lends?
Further, I ask whether the hon. and learned Gentleman will use the three-year extension as an umbrella to cover a policy or whether the Government are proscrastinating in the way that we have had procrastination before? Has the hon. and learned Gentleman answered that? Certainly not. Have the Government any policy other than one of hoping that the Committee will be easy-going enough for them to get the Bill without declaring a policy?
I know that I am contumacious, obdurate and suspicious about the Bill, but my right hon. Friend the Member for


Huyton (Mr. H. Wilson), who is in favour of the Bill in general terms, agreed that the Minister had not told us any policy. Therefore, it was not some defect either of hearing or understanding on my part that made me think that the Minister had not answered. Will he tell the Committee why there has been thisvolte face from the sarcasms of the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) in 1950? The right hon. Gentleman complained that the then Minister, who really was doing something for the film industry to put it on its feet so that it could earn its own living—

Mr. H. Strauss: The hon. Gentleman has said again and again that he asked me whether the Corporation was entitled to lend money not expecting to get a penny back. Not only did I answer that question, but I drew the attention of the hon. Member to the terms of the Act. I will read the relevant words again. Some hon. Members attempt to do justice to a Minister's reply. I resent this constant repetition of an allegation when the hon. Gentleman need only read what I said last time to know the answer. These are the words of the relevant part of the Act: They can
…make…loans to be employed in financing the production or distribution of cinematograph films to persons who, in the judgment of the Corporation.…

Mr. Lever: On a point of order, Sir Charles. Has the hon. and learned Gentleman unlimited right to interrupt me when he did not allow me to interrupt him?

The Chairman: I thought the hon. Gentleman gave way to the hon. and learned Gentleman.

Mr. Lever: I gave way for a second, but surely the hon. and learned Gentleman is not entitled to continue like this.

The Chairman: I thought the hon. and learned Gentleman was answering the question put by the hon. Member.

Mr. Lever: I want to know what document the hon. and learned Gentleman is reading.

Mr. Strauss: I am reading the document to which I referred in winding up the Second Reading debate, namely, the principal Act, which we are here amending.

The hon. Gentleman will find the words in section 1 (1,b). The terms are:
…financing the production or distribution of cinematograph films to persons who, in the judgment of the Corporation, while having reasonable expectations of being able to arrange for the production or distribution of cinematograph films on a commercially successful basis.…
How can the hon. Gentleman pretend that that enables the Corporation to lend to people without an expectation of getting the money back?

Mr. Lever: That proves that the suspicions of my right hon. Friend were always justified and that the Minister did not know until tonight. I asked him on Second Reading—

Mr. Strauss: The hon. Member will find it in Hansard.

Mr. Lever: I have a copy of Hansard here, and that is not in it. The hon. and learned Gentleman refused to answer the question which I put to him. I suggested that the answer was "Yes" or "No," but all he said was "Read the Act." He can see that that is so in Hansard.
I gather that he is now saying for the first time—I am very much relieved that the House now knows it—that the Corporation which he expects us to extend for three years has no power to lend unless it expects to get the money back within the next three years. If we vote for an extension, can we rely upon it that the Corporation will not be lending money for any purpose unless it expects, on a commercially satisfactory basis, to get the money back? I hope I am right in trusting that that is so. The House will wish to understand that the Corporation will not during the three years have the power to lend money otherwise than in the honest expectation of getting it back.
Will the hon. and learned Gentleman tell the House that he is satisfied that in its five years the Corporation has obeyed the law, if that be the law? Is he satisfied there have been no occasions when the Corporation has lent money otherwise than in the honest expectation of getting it back? On the commercial basis which the hon. and learned Gentleman has put forward, I suggest that there is good reason for not giving so readily the three-year extension which he desires.
I intervene only to protest that I have not yet been told how much the Cor-


poration has cost and how much it will cost and what is the Government's policy and the policy of the Corporation. I have not been told whether the Corporation expects to be wound up in three years' time, whether it is continuing on that basis only until the film industry somehow gets back on its feet, whether in three years' time the industry is to be thrown to the wolves, or what is to be done about the Plant Report and other Reports. I have not been told whether in three years' time the Government will try to buy more time a little more expensively. We have not been told why there has been a total volte face from the position when the Bill was first introduced, when we were told that it was a temporary Measure, to the present position in which the Government seek to renew the provisions without offering a suitable explanation to the House of Commons.

Mr. H. Wilson: I did not wish to intervene again, but I must comment on what the hon. and learned Gentleman said about my intervention. He seemed to be rather nettled and said it was unworthy of me to have accused him of not knowing anything about anything.

Mr. H. Strauss: That is so.

Mr. Wilson: Not at all. I have never suggested that the hon. and learned Gentleman did not know anything about anything. We all know his reputation for being one of the most learned Members of the House. I was complaining that he did not know very much about the Bill or the film industry.
I can justify that on two points relevant to the Clause. During the Second Reading I put a question to him on a number of occasions. He did not go to any trouble to find the answer but just read out what had been put in front of him, and that turned out to be inaccurate, and it also showed that no adequate inquiries had been made. The hon. and learned Gentleman later said that proper inquiries would be made.
The second illustration comes from his intervention a few moments ago. The Committee must be doubly suspicious of a Government coming forward for money if the Government do not appear to have considered the details of the way in which the money is to be dealt with. Certainly, I was able to satisfy the House when the principal Act be-

came law, and several times thereafter I took a very close personal interest in all the safeguards necessary to supervise this expenditure.
When the Government—and we get this so often from the right hon. Gentleman and his hon and learned Friend—say in connection with any industry, "Of course, it is not for the Government to say anything about this; it is a matter for the business men in the trade, be cause they know more about it," we often disagree with them. But when the hon. Gentleman says that in relation to the Film Finance Corporation, he really is in some danger of misleading the Committee. It is not right for the hon. and learned Gentleman to suggest that the Government do not intervene in these affairs because the Corporation have been doing the job all right and be cause the Government do not want to interfere, because he knows he has been very effective in quoting the principal Act against my hon. Friend—

Mr. Strauss: May I point out that his hon. Friend said that I did not give the hon. Gentleman that answer in winding up on Second Reading and that I was quoting it for the first time then. Any hon. Member in the Committee who is interested and will look at Hansard for 25th November will find that I read out the whole thing in columns 455–6. To say, as the right hon. Gentleman does, that my recent intervention shows how I have neglected my duties on former occasions simply is not right.

Mr. Wilson: If the hon. and learned Gentleman had allowed me to continue, before interrupting in order to carry on an argument with my hon. Friend, he would have seen that the argument I was going to produce was that the hon. and learned Gentleman's intervention shows that he has not studied this business as fully as he ought to have done before asking for a further extension of time in the use of Government money. It is not good enough for a Minister to say that the Board of Trade leaves this question of safeguards to the Corporation, because, as the hon. and learned Gentleman knows, the principal Act, in Section 2 (3) says:
The Corporation shall not, except in such classes of case as the Board of Trade may approve, make a loan to any person unless he is carrying on the business of distributing cinematograph films.…


Things can change very rapidly in the film world, and I still have not had an answer to the question I put some time ago. I am not complaining about it now, because I know the Parliamentary Secretary is making inquiries. Surely, both the President and the Parliamentary Secretary should be continually reviewing these classes of case in order to see whether in other cases we should not be expanding the types of loan such as those given from 1949 to 1951, when we were extending the classes and types of case in which loans could be given. I suggest to the Parliamentary Secretary that it was not enough to say that it is a matter for the Corporation, because the Corporation can operate only under power given by the Board of Trade.

Mr. Emrys Hughes: There are certain questions that my hon. Friend the Member for Cheetham (Mr. H. Lever) seems to have overlooked, and I want to raise the question of the expenditure of money under this Bill in relation to Scotland. I see that one of the Joint Under-Secretaries of State for Scotland is here, presumably to give his advice to the Minister, and there is one aspect of this matter which should be taken into consideration.
A lot of money has been spent in Scotland on the development and production of films, and there is one which may be familiar—"Rob Roy"—produced by that famous Scots producer, Walt Disney. Can the Parliamentary Secretary give us any information whether any money under these subventions has gone into the production of this "Rob Roy" film?

9.30 p.m.

It has caused a great deal of criticism in Scotland, and Scots people are wanting to know whether the taxpayers of Scotland are subsidising the production of these huge films in the Highlands of Scotland and what exactly is the financial relationship involved. We can understand the argument that it is necessary to subsidise the film industry, but is there any necessity to subsidise it twice? We have every evidence in Scotland to assume that we are not only subsidising these wealthy corporations directly, but indirectly as well, and I ask the Parliamentary Secretary to throw some light on one particular question.

To what extent was this film of "Rob Roy" subsidised under the Act? We know not only that public money was involved in this; we know also that there is the question of the labour. Is any account taken in the subsidy of the expenditure involved, for example, in respect to the payments of the Scottish soldiers who appear in this film which is being subsidised in this way? There is a good deal of criticism in Scotland because soldiers of the Argyll and Sutherland Highlanders spent days employed, at very small rates of pay, by Walt Disney in the production of this particular film. There is objection not only from the soldiers, who did not go into the Army for that purpose, but also from the employees in the cinema industry who might have been used in this way. So I think that the more light we have on this question the better for everybody concerned.

Question put, and agreed to.

Clause ordered to stand part of the Bill.

Clause 2.—(POWER TO ENTER INTO ARRANGEMENTSWITH RESPECT TO CERTAIN LOANS.)

Mr. H. Lever: I beg to move, in page 2, line 12, at the end, to insert "and the approval of the Treasury."
I do not know whether the Parliamentary Secretary could shorten what I have to say by giving some indication that he will accept this very reasonable Amendment intended to still some of the very considerable disquiet felt about this rather novel Clause? We feel that, in addition to having the benefit of the Board of Trade in securing these debts and in making sure these arrangements are in the public interest, and made with proper regard to the safeguarding of public money, we should also have the assistance of the Treasury. Although I suggested it on Second Reading it seems to me more vital than ever that we should have this provision, after what we have heard from the President of the Board of Trade and the Parliamentary Secretary about this Bill and the film industry. It is perfectly true, as has been said, that a little knowledge is a dangerous thing, but Ministers in this case seem to suppose that safety lies in possessing none at all.

Mr. Hale: Nobody has ever suggested that a little knowledge is a dangerous thing. It is:
A little learning is a dangerous thing, Drink deep, or taste not the Pierian spring.

Mr. Lever: I am aware of the lines, but I said what I said for the sake of the Committee. Ministers can be acquitted for having exposed themselves to the danger of having either a little knowledge or a little learning of either this Bill or the film industry. If safety lies in possessing none at all, they are surely iron clad.
I must explain this somewhat complex matter to the House. Clause 2 (1), to which my Amendment is addressed, is the Clause which gives the Finance Corporation power to make arrangements with their debtors who cannot repay the money except with damage to film production. That means that it may involve a very large debt. Consider the case of British Lion, who owe £ 3 million to the Finance Corporation, coming under this Clause to the Corporation and saying, "Will you please come to some settlement with us other than insisting upon full repayment?" The Finance Corporation is empowered by the Clause to reach some settlement with them, and that settlement can include waiving of interest and almost any other financial arrangement which it likes to make, including taking shares and debentures.
Clearly that is a complex financial matter. I tell the Committee frankly that I would sooner the Treasury were there. I should like to see a really stern Treasury official present when we come to release millions of pounds of public money to a defaulter in this way. Could we not transfer the Treasury official from the educational system to the Film Finance Corporation so that instead of damaging the educational system we could get two benefits at the same time; a better educational system and at the same time ensure that public money is not thrown down the drain to some of these defaulting film producers.
I think the principle of my argument is sound. A man may conceivably be President of the Board of Trade and yet understand very little about debentures, ordinary shares or financial mechanism. With the Chancellor of the Exchequer or the Treasury watch dog it is a different matter; this is just their meat.

That is specially the case because the Government recognise the facts: they may keep things secret from the House but they do not keep them secret for very long from the Treasury, because in subsection (2) they agree that the Treasury must consent to any remission of the liability of the Finance Corporation to the Board of Trade.
I hope the Minister will agree to accept the Amendment. The Bill says that after the Corporation have dealt with the defaulter it comes to the Treasury, but the right time to have Treasury assistance is when it is making these complex arrangements involving large sums of public money. When there is this disquiet, it could not be harmful to have a Treasury official present. An experienced Treasury official could watch the public interest. He is used to matters like this, whereas the President of the Board of Trade is more used to matters like exports and quotas than he is to highly complex financial arrangements.
I was surprised when I looked at the Order Paper and saw that the Minister had put down what is a very useful Amendment, which shows that he recognises the situation and shows some signs of repentance after his Second Reading defiance. On Second Reading he said all was well, but he has put down a very significant and welcome Amendment. I urge him to accept my Amendment; I do not say I could learn to love the Bill, but I might learn to hate it less, and to hate it less articulately, if the Minister would meet us on this point. It will look better and it will be better if, when the Board of Trade come to deal with defaulters, we have somebody present from the Treasury, some stern man. Take him off the education system and put him on to the Film Finance Corporation; he could do great service to the public and would do no harm to anybody.

Mr. H. Wilson: I want to support this Amendment and to make a special appeal to the Parliamentary Secretary about it. It is, I suppose, symptomatic of the frustrations of human existence that after all the monumental oratory and eloquence of my hon. Friend the Member for Cheetham during the passage of the Bill, it has come down to this: all he is going to get is the acceptance by the Government of a small Amendment which will add the words "and the approval of the Treasury."
In normal circumstances I must say that the idea of myself intervening to support any extension of the powers of the Treasury would be unthinkable and repugnant to me. Certainly, in so far as there may be any proposal to increase the Treasury's powers over our economic life or over the Board of Trade that would be proposed in the ordinary way, I would be very much opposed to it. I have a lot of experience of these inter-Departmental questions, as the Parliamentary Secretary has, and I should like to pay tribute to his right hon. Friend for having resisted the encroachment of the Treasury into certain aspects of the Board of Trade's normal work. I think that his stewardship at the Board of Trade, which I would criticise in many other directions, has at least been remarkable in that direction. But this is not a question of economic co-ordination or interference with the normal and historic functions, statutory and otherwise, of the Board of Trade—this is a question of the protection of the public purse.
I would not go all the way with my hon. Friend in his arguments in support of this Clause, but I feel that he made a very good point when he suggested that, in making the final arrangements for clearance and remission or otherwise dealing with the debt, it would be valuable if the Treasury could be in from the start. I know what the Parliamentary Secretary is going to say in reply, that the Treasury would automatically be consulted and that obviously the Board of Trade would not be free to make these arrangements without the help of the Treasury. I am sure that is right.
We do not in our statutes frequently write in all the Ministers that may be concerned or consulted in the usual way, but I think that a special exception is often made by inserting the phrase, "With the approval of the Treasury," and I think that would be entirely appropriate in this case. I hope that he will agree to the Amendment so eloquently moved by my hon. Friend.

Mr. Emrys Hughes: I hope that the Treasury will be called in in this case. If the Treasury were called in, I am sure that they would keep a very vigilant eye on expenditure in connection with supplying cheap labour for these film companies. I am not by any means satisfied

that there has been an adequate explanation of why British soldiers have to act as film stars at very low rates of pay. I am quite sure that if a Treasury official came along, he would say, "So many soldiers were employed for so many days in the production of a film," and that the Treasury would say that a really decent bill must be sent to Mr. Walt Disney. So I suggest that the Treasury should be called in, because at the present time I believe that the British taxpayer is providing for the production of films for wealthy corporations and that the nation is entitled to reasonable and just payment, which I do not think that the Treasury would entirely endorse.

Mr. H. Strauss: I will give to the hon. Member for South Ayrshire (Mr. Emrys Hughes) the information which it was not convenient to give after his previous speech. That is that the film in which he is particularly interested was not financed by this Corporation and has nothing to do with this Measure.

Mr. Emrys Hughes: I am sure that the hon. and learned Member is not trying to mislead the House, but there is no doubt at all that a large number of soldiers was employed in the production of this film.

Mr. Strauss: I hope to have an interesting conversation with the hon. Gentleman about that at some time, but what he says has nothing to do with this Bill.
Let me say at once to the hon. Member for Cheetham (Mr. H. Lever), who moved this Amendment, and to the right hon. Gentleman the Member for Huyton (Mr. H. Wilson), who supported it, that as the latter indeed supposes there were certain considerations which he put forward which are, of course, present in our minds. Nevertheless, I will give reasons why I think this Amendment is wrong and that the Treasury is rightly not mentioned in the first subsection, although it is rightly mentioned in the second.

9.45 p.m.

The effect of the Amendment, if it were adopted, as the hon. Member, I know, will agree, would be that some outside body, in this case the National Film Finance Corporation, would have to seek two different approvals. I agree with the right hon. Member for Huyton that there may be cases where something of that


sort is right, but in the normal way, when Parliament says in effect in the statute, "This needs the approval of the Government," we do not insist on two separate searches for approval. If what is desired to be secured is consultation within the Government, that, as the right hon. Gentleman knows, is not normally provided in the statute. It is a question of customary draftsmanship. I agree with the right hon. Gentleman that there are occasional exceptions.

What may have been overlooked by the Committee is that it will not be every case of an arrangement under subsection (1) which will involve any corresponding action under subsection (2). Where there is action under subsection (2), there, quite rightly, the Treasury approval is mentioned. If action is taken under subsection (1) which is likely to result in a corresponding action under subsection (2), it is quite obvious that the Treasury will be consulted by the Board of Trade. But on the grounds of the usual rules of draftsmanship in this matter, I suggest, both to the right hon. Member and to the hon. Member for Cheetham, that there are good reasons for not mentioning the Treasury in the first subsection but for mentioning them in the second subsection. For those reasons, I suggest that hon. Members opposite should not press the Amendment; but I could not advise the Committee to accept it.

Mr. Keenan: Why is the Minister so reluctant to give anyone else the authority? While I am not at all happy about two Departments dealing with the same thing, there is obviously a necessity for authority in subsection (2). We remember the complaint that was made in the discussions on the previous Clause and its Amendments, when we had a clear indication that the Departments evidently were not aware of what had been done previously and did not seem clear as to what was likely to be done. I think, therefore, that there is every justification for the addition of the words, "and the approval of the Treasury" to ensure that there will be supervision.
It does not necessarily follow that the Treasury must veto everything. There may on occasion be justification for the Treasury not to be consulted, but in this instance, particularly in view of what we

have heard and the dissatisfaction which has been expressed, there is justification for the inclusion of the Treasury also in subsection (1).

Mr. Eric Fletcher: I was disappointed with the speech of the Parliamentary Secretary and particularly disappointed that he relied on purely technical grounds for resisting the Amendment. I should have thought that in view of the volume of criticism which has been expressed on the Bill—I am not saying that I agree with all of it, for I do not—the Parliamentary Secretary on this occasion would have wished to do everything possible to allay the suspicions which have been expressed.
It is not good enough for the Parliamentary Secretary to say that it is unnecessary to have the approval of the Treasury coupled with the approval of the Board of Trade. I ask the hon. and learned Gentleman to bear in mind that the object of my hon. Friend the Member for Cheetham(Mr. H. Lever) in moving the Amendment to this Clause is to carry the matter a step further and to give the public the greatest possible protection. When we were discussing Clause 1 my hon. Friend the Member for Oldham. West (Mr. Hale) indicated a number of methods whereby, unless the Board of Trade and the Government are particularly vigilant, public money may be lost.
I was disturbed on reading the Second Reading debate to find how little the President of the Board of Trade and the Parliamentary Secretary interested themselves in the affairs of the National Film Finance Corporation. The Parliamentary Secretary in particular, when he replied to the debate, almost went out of his way to dissociate himself from the activities of the National Film Finance Corporation. He said in his winding-up speech on the Second Reading:
…the Board of Trade do not know normally at all who have applied to the Corporation for loans. Nor do we intervene one way or the other to encourage the Corporation to make loans in particular cases or to discourage them from making loans in others."—[OFFICIAL REPORT, 25th November. 1952; Vol. 521, c. 452.]
When I read that it seemed to me that the present Government were placing quite a different interpretation on their obligations from the interpretation which the late Government placed on their duties.
It seems to me that the present Government are departing radically from the duty which the House imposed on the Board of Trade when it passed the original Act.
It is precisely when these financial arrangements come to be made—and this is a particularly novel feature of the Bill—that the greatest possible care and vigilance is required. The President of the Board of Trade, in recommending the Bill on Second Reading, sought to justify this Clause on the ground that there are occasions when a lender of money may, for prudent reasons, wish to make a composition or arrangement with his debtor short of cancelling his debt. As is well known, every kind of circumstance may arise when the financial arrangements contemplated by this Clause come to be made. Losses will have been made, and sometimes those losses will be very substantial, perhaps as much as £50,000, £100,000, or £120,000, by a particular company with capital.
One of the things the National Film Finance Corporation has to consider is whether it should write off the whole of that loss; whether it should make some composition with the debtor; and what steps should be taken about such residual assets as the company may have, the foreign rights of the film, the reissuing rights and various other residual rights that have not yet been exhausted. It is particularly important that before any such financial arrangements are made, there should not merely be a full investigation, which I am quite sure the National Film Finance Corporation and the Board of Trade will make, but also that the public should be fully satisfied that every possible step has been taken to safeguard the public interest.
I would remind the Committee that we are taking an entirely unprecedented step in this particular legislation. We are allowing a body set up by this House to write off substantial sums of money, and in the process of doing so every possible risk will be run unless the House is guaranteed that full precautions will be taken by the Government to investigate each transaction. I agree with my hon. Friend that it is particularly important that the Board of Trade should have the assistance of the Treasury and that the

public should know that the Board of Trade have the assistance of the Treasury.
When my hon. Friend the Member for Oldham, West was speaking a moment ago, he drew attention to one kind of case which might arise. There may be a company which has made a large loss in film production, perhaps through no fault of its own, and one course would be for that loan to be written off. In fact, it might be better for the Government to authorise the National Film Finance Corporation to write it off than to make a composition, because a company which has made a substantial loss finds itself in an attractive and advantageous position compared with its competitors, since then, either in the same hands or in other hands, can venture into other fields of production and, if it then makes a large profit, can then set off its previous loss against the new profit and thereby avoid taxation on its profits which it could not do if the loss were extinguished. Who is to get the benefit of these companies with an accumulated loss?
There will obviously be a temptation in many cases for people interested in fresh ventures to acquire the loss of such a company and there is no reason why, as the law stands, people associated with a company should not acquire the debt to the National Film Finance Corporation for 2s. in the £ or some other small figure. It might be that the National Film Finance Corporation in some circumstances might think they were doing good business in getting a composition instead of extinguishing the debt, but in reality they would be doing nothing of the kind because they would be enabling the company to carry on and make a profit which would not be taxable.
I am not suggesting that this is the kind of thing that has happened in the past or is likely to happen, but the mere fact that attention has been called in this Committee to its possibility makes it essential in my submission that we should have the clearest possible assurance from the Board of Trade that every device of this kind will be most carefully watched before any financial arrangement which the House will authorise under Clause 2 (1) is entered into. It is because of the need for obtaining every possible precaution that I hope the Parliamentary Secretary will reflect on the pressure that has


been put, since the object of this pressure is to protect the public purse. I should have thought it was his duty to give the maximum assurance to the House that the public interest will be protected in this matter.
We are not asking very much and it is not good enough for the Parliamentary Secretary to say that when these financial arrangements come to be made with the Board of Trade there may be a Treasury representative present. It is not good enough for the hon. and learned Gentleman to say that the Government is one and indivisible. There are plenty of precedents for having two Government Departments mentioned in a statute and for requiring the consent of both of them before a step of this kind is taken.
Even if it be thought that there is a purely technical objection to the phraseology which my right hon. Friend has adopted in his Amendment, I should have thought that could be overcome if the Parliamentary Secretary will say that he accepts the spirit of the Amendment and the reasons which prompt it. If, for example, he would at the appropriate stage insert in the Bill instead of the words proposed "and the approval of the Treasury" some such words as "after consultation with the Treasury," I should have thought that would be satisfactory and would allay the widespread misgivings that have been expressed about this matter and would justify the Committee, if it decided to do so, in giving this Corporation powers of an entirely unprecedented nature which are fraught with great risks to the Treasury unless every adequate safeguard is taken and shown to be taken.

10.0 p.m.

Mr. Hale: I do not feel that the necessity for this Clause has been made clear by the Parliamentary Secretary's answer to observations of mine a few minutes ago. When I asked for some day-to-day particulars of the methods of operation of the Corporation, the Parliamentary Secretary said very courteously, "We leave it to them. We do not act as if we were watch-dogs in this matter. We appoint four or five people of ability and eminence and experience and leave it to them. They decide on the right thing to do, subject to limitations imposed upon them by the Act."
There is no other field of activity in which that is done. There is no other form of Parliamentary expenditure in which the Minister says to the House or to the Committee, "One does not want to go into details about this. One does not want to embarrass the House with unnecessary particulars, because the particulars are rather dispiriting and because we have not got them anyway. We are leaving it all to the Corporation."
If they are leaving it all to the National Film Finance Corporation, then for heaven's sake let us have some control. There was a time in the history of the House of Commons, when David Hume was active, when the House would sit for hours looking into the loss of half a crown. Although that would not be wise in these days when we are dealing with millions of pounds of public money, there is no excuse for the reply that this is a delegated matter dealt with in a delegated way and therefore we ought not to look into it. It will be seen from Appendix D of the Annual Report and Statement of Accounts of the National Film Corporation that the cost item for craft labour varies from only 7·7 per cent. to 9·3 per cent.

Mr. O'Brien: That, unfortunately, is true for all industry. Craft labour gets the least out of the swag for their toil and trouble.

The Deputy-Chairman: At the moment I do not follow what that has to do with the Amendment.

Mr. Hale: We are suggesting that the Treasury should look at the figures, because it is fairly obvious that no one has done so, or if they have been looked at the proper steps have not been taken to try to get the proportions right. My hon. Friend the Member for Nottingham, North-West (Mr. O'Brien) says that in all industries a limited number of people take a disproportionate share of the profits. I do not know about that, but that is exactly what we are here to consider and that is why we should demand that there should be more public supervision where public money is involved and that more care should be exercised.
When the Parliamentary Secretary came to reply to the very able speech of my right hon. Friend the Member for Huyton (Mr. H. Wilson), he put forward two alternative pleas. The first was,


"It is a very undesirable thing to do." The second was, "We always do it." That is precisely what he said. He said, "We cannot get this sort of thing into the Bill. It will not be right to put it in the Bill." Then two minutes later he goes on to say, "Of course, we always do it." If they always do it, why should it not be in the Bill, and if it is undesirable to do it why do they always do it?
I should like to refer the Committee for one moment to a set of figures in the Report which are directly relevant to this matter. I am discussing "Appendix B, Schedule of Loans—March 31st, 1953."The figures are as follows: British Lion Film Corporation Limited. Total loans approved, £3 million. Less amounts not required, nil. Less amounts not yet taken up, nil. Less amounts written off, nil. Less amounts repaid, nil. There is still £3 million. Is it really argued in those circumstances that there ought not to be some little Treasury consideration before another £3 million goes?
No one is to blame for this. I want to be fair about it; most of this was advanced by my right hon. Friend and he explained that the loss would be very substantial as there was a crisis in the industry. But this is our cumulative experience and certainly not a penny will come back. There is only £1 million actually written off and £2 million outstanding; something might come of it. My hon. Friend the Member for Cheetham (Mr. H. Lever) asked what a businessman would give to get it back; I do not know. My hon. Friend the Member for Nottingham, North-West might make an offer.
That is not the only one. There is British Film Makers Ltd. with amounts approved, £706,620; amounts not required, nil; amounts not yet taken up, nil; amounts written off, nil; amounts repaid £140,540, and, finally, £566,080 still owing. Not a soul in this Committee knows what are the chances of recovering that money, whether they are good, bad, or indifferent, but we know that if £140,000 is written off at that stage it is not a very hopeful sign.
Then comes the much more serious item, "other advances." It is the sort of item which on an individual balance sheet is put down as petty cash, stamps

mislaid, or sundries. Under that heading the other advances approved amount to £4,163,925. What a document to send to a Committee of the House of Commons to consider. Of that sum £89,771 was not required, £156,000 was not taken up, £1,765,896 has been repaid, and£341,000 written off, while £1,810,000 is still outstanding.
I have never wished to be discourteous to the Parliamentary Secretary, who, I am sure, tries his best, but we are in a situation in which £3 million is owing in respect of British Lion, £566,000 is written off in respect of the British Film Makers Limited and £1,810,000 is owing to petty cash and some items not enumerated.

Mr. Keenan: Do not look at me, I have not spent it.

Mr. Hale: My hon. Friend should not put ideas into my head. We say to the Parliamentary Secretary that the sensible thing would be to have the Treasury in. It is rather like saying to a business man, "Have your accounts audited, or at least have the advice of some financial adviser. As you have been losing money hand over fist, have someone to watch that you do not do it again." The Parliamentary Secretary says, "We really cannot do that." Had he said, "It is no use having the Treasury in because we do not have the facts to put before the Treasury," that would have been a practical, but not a very convincing, argument. It would have made sense and from his previous speech I understand this is what he does say, "We leave it to these gentlemen who are experts."
On a previous Amendment the Parliamentary Secretary assured us of what I heard with surprise. I am bound to say that on reflection I am not sure that I heard it with any great pleasure. He says, "No, we do not do this for cultural reasons or because of artistic reasons; we do not lend because a film might serve an educational purpose. The dominant factor is set out in the Act." I am not suggesting that these are matters not to be considered, I am not suggesting that it may well be that the Film Corporation might not give some preference, other matters being equal, to a film that might serve a purpose, but the terms of the Act are that the money shall only be lent if there is a reasonable chance of getting the money back.
These are the conditions by which these experts are bound. The test of their expertise is that they have lost on nearly everything that they have touched. We are now told that there is £5 million outstanding in relation to a total fund of £6 million, the repayment of a great deal of which is still in doubt. The Parliamentary Secretary occasionally looks at me with an air of mild surprise rather like, was it Cortez, on a peak in Darien? But that is what I understood. I understood the hon. and learned Gentleman to say so far as British Lion was concerned £2 million was still outstanding. [An Hon. Member: "Three million."] I thought that one had been written off. I certainly understood that the hon. and learned Gentleman was certainly not assuring the House that he looked at that with the optimism which he might have looked at it some time ago.
I am not criticising these people. I am not suggesting for a moment that the Film Corporation might not, on balance, have served a very useful purpose. I am trying to examine the Parliamentary Secretary's arguments. He said, "We only lend money if there is a reasonable chance of getting it back."
Point No. 2 is that he said, "We do not ourselves look with very great care at all the accounts and details because we have delegated five experts to do that." Point No. 3 was, "We have lost money hand over fist, possibly to the tune of £4 million to £5 million." Point No. 4 was, "We must still go on leaving it to the experts because these people are experts."

Mr. Keenan: Do none of those in the film industry know how money is made?

Mr. Hale: I do not know, but I do not want to be diverted. I am trying to keep to the very narrow point—I make no criticism of anybody, I do not think I am in a position to do so—that when we have heard all that and we say, "Consult the Treasury in future," that we think the Treasury should give formal approval or, if there is some technical difficulty about the Treasury issuing their formal ukase or the Lords Commissioners being called in from time to time, consult them. The Financial Secretary is an ebullient, friendly and forthcoming man: he is quite easy to consult, and what harm would be done?
It may be of course that the Parliamentary Secretary shares my own view of the Chancellor's budgeting capacity. It may be that he has lost confidence in the financial direction of the country. It may be that he feels that on the whole the Government have made such a mess of so many things that they might make an even worse one of this. There are solid grounds for that view, and if the hon. and learned Gentleman had said that I should not press the matter, I should feel that there was some reason in what he said. But he said, "We do consult, we get all the worst of it and none of the best. We consult them without the figures; we consult them regularly, while we have delegated everything to the experts, and on the basis of that consultation we ask you not to accept the Amendment."
That is not fair to the Committee. This is a simple provision which has been added to many Bills. It is not a novel suggestion. Many Ministers have accepted it and no Minister has ever got up and said, "I am sorry that you have made me consult the Treasury; they have not given me very good advice." No one has come and said, that this provision has done any harm. Is there any conceivable reason why the Amendment should not be accepted?

10.15 p.m.

Could there be any conceivable reason? Yet at a time when we might very well be going home to bed we are kept here by what—I do not want to overemphasise it—is really obstinacy. [Laughter.] Hon. Members should not laugh. After all, £6 million is £6 million. Would hon. Members opposite put any money into a firm with a record like this? Would they buy shares in such a firm if they were told that the company had no auditors of any kind—because that is what it means in relation to the operations of the Board of Trade. I have no doubt there are excellent auditors auditing the accounts of the Film Finance Corporation, but in relation to this the House, in relation to the custodian rights of the House and the discharge of the financial duties of the House, which has always been recognised as the supreme duty of each individual Member, we are told, "No, you can take it or leave it." In fact we are told to treat this like a


Statutory Instrument. We are told, "You can vote against it or accept it."

Mr. H. A. Price: What, all six of you?

Mr. Hale: The hon. Member is a little ungenerous in saying that. We are in Committee. I have been in Committee in this House since 11 o'clock this morning. We had an important Committee sitting this morning. It is no reflection on the confidence that my colleagues place in my right hon. Friend, and indeed in some of us, that they are happy to leave those interested in this matter to deal with it, knowing that we shall be expressing not merely our own views but trying our best to represent theirs.
There is no reason why, in a Committee in which we are trying to put through Amendments which could readily be agreed, we should have a vast cohort of people sitting here in order to force a vote. It is a measure of the generosity and the decency with which we approach this matter that we have not attempted to force a vote. We have tried the art of pure persuasion. It may be that on Report we may very well consider having to force a vote unless we get a little reciprocity in this matter.
In a sense this is an agreed Bill. It was introduced originally by my right hon. Friend the Member for Huyton and he has expressed no regret for having done so. It was a Bill which rendered a great service to an industry in its time of distress, and the President of the Board of Trade is continuing it. To a large extent it was accepted at the time of its introduction and it was a bi-partisan Measure…

The Deputy-Chairman: The hon Member is now discussing the principles of the Bill.

Mr. Hale: It is one of the difficulties when one is interrupted by such observations that one gets diverted from the main stream of one's argument, and I am sorry that I permitted that to occur to me.
I hope that the Parliamentary Secretary will try to be a little co-operative. I hope he will say at least that this matter is one which will be considered. We are not concerned about the form of words. Surely this is a good and a right thing to

do. Surely it is a prudent thing and in accordance with the careful financial traditions of the House.
The fact that I ask for Treasury approval does not denote any supreme confidence on my part in their judgment or their wisdom. It may be that after another Election the Treasury will improve. But for the moment it seems the appropriate step at least to provide that one not very competent Department is subject to the control of another not very competent Department, and in the present condition of things that is really all we can hope for.

Mr. O'Brien: May I make a brief appeal to the Committee and also to the Minister who is to reply? My appeal is two-fold. The Second Reading debate and the present debate and, if the present tendencies are anything to go by, the debate on Third Reading will give a completely false picture of the British film production industry to the British public. This Committee must never lose its right—

The Deputy-Chairman: I do not at the moment see the relevance of this to the Amendment.

Mr. O'Brien: I think that, if you will allow me, in my inexperience, to elucidate the point, you will see the relevance of it, Mr. Hopkin Morris, I appeal to the Board of Trade to accept the Amendment in principle. Perhaps some other form of words could be devised before the Report stage. I do so because, if necessary, we should give added confidence to the taxpayer in regard to the modicum of assistance given to the industry.
To continue the analysis of facts which are already well known could give the false impression that the film industry is run by a bunch of crooks. That is not so. There is no monopoly of original sin in the film industry. Original sin, by divine wisdom, has been fairly and adequately spread over mankind.

The Deputy-Chairman: I do not think that this Amendment deals with original sin, either.

Mr. O'Brien: It could be argued, Mr. Hopkin Morris, that when one refers to the Treasury one refers to something even deeper than original sin. But, to be serious, I ask the Committee to maintain


a sense of proportion in its criticism of these matters and not to carry criticism to such a stage that the public is completely misdirected.
Also I would point out, on the question of consultation with the Treasury, that the remarks of the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) and other hon. Members should be a salutary lesson to those in the industry who require it. There are other corporations, large and small, which have been able to carry on with their good work in British film production without being connected with the Film Finance Corporation.
It may be thought that other sections of producers who have had difficulties in recent years and who have safely emerged from them have not done so by their own effective and efficient commercial methods. It may be thought that all producers are in one boat. That is not so. I appeal to the President of the Board of Trade to see whether he can give additional confidence to the public by arranging for some form of consultation with the Treasury in future.

Mr. H. Lever: One of the consequences of the somewhat unfortunate way in which we have had to discuss the Bill is—though I do not suggest for one moment that Mr. Speaker will allow it—that we shall be asked to take the Report stage and Third Reading close on the heels of the Committee stage.

The Deputy-Chairman: That does not arise on this Amendment.

Mr. Lever: It is necessary sometimes that the Minister should have time to reflect, and one has to keep the discussion in progress to provide him with the time.
We have an unprecedented situation in which public money is being dealt with in a way which is novel in the extreme. A simple legal safeguard which nobody could attack on merit has been firmly resisted by the Minister without the support of any of his Friends. This is a genuine non-party matter. I suspect that several hon. Members opposite would feel happier if the Amendment was accepted.
I am sure that hon. Gentlemen opposite are as anxious as we are to see that public money is protected. This is a non-party point. The Minister, without the support of any of his hon. Friends, has obdurately resisted a most reasonable

Amendment. I am trying to help the Minister, so that when we come to the discussion of the Question, "That the Clause stand part of the Bill" he will have the Clause in better shape, a shape which will be acceptable to a critical House of Commons, because the House of Commons is now awake and aware of the problem. The Clause provides for the settlement of debts which may at some time amount to millions of pounds.

The Deputy-Chairman: The hon. Gentleman must not anticipate the discussion on the Question, "That the Clause stand part of the Bill" but must confine his remarks to the Amendment.

Mr. Lever: I do not wish to challenge the Chair, Mr. Hopkin Morris, but how can I discuss the improvement of the Clause without in some way discussing how the Clause will stand without the improvement? It is like offering a new nose to a man with a face which could do with a new nose. The Amendment is equivalent to a new nose. How can one argue the merits of the new nose—

The Deputy-Chairman: I was pointing out to the hon. Gentleman that he must not anticipate the discussion on the Question, "That the Clause stand part of the Bill." He must confine himself to the Amendment before the Committee.

Mr. Lever: What I am doing is asking the Minister to help us all by accepting an Amendment which, in sound sense, ought to be accepted. Not a single voice other than his has been raised in the Committee to challenge the Amendment. He has no time to consider it except the time which I am giving him at great personal sacrifice by keeping on my feet.
The arrangements are that we shall proceed straight away after this stage to the Report stage and the Third Reading, if Mr. Speaker allows it. I am giving the Minister the opportunity to reflect and to realise that there is not a supporter of his who does not realise that it would be far better if he accepted the reasonable Amendment to the Clause. I hope that while I have been addressing the Committee the Minister has been reflecting, and, in particular, reflecting on the very earnest appeal of my hon. Friend the Member for Oldham, West (Mr. Hale), who asked what possible harm could be done by accepting the Amendment.
I do not want to do the Minister an injustice, but, suspicious as I am about the film industry and the faults envisaged under the Clause. I am becoming even more suspicious when the Government resist an innocent Amendment. Why do the Government not want the Treasury to be present when settlements are reached? I entered the Chamber tonight hoping that the Government, who had already shown signs of becoming aware that they had a little duty to protect public money, would go further with me and accept the Amendment. But they will not. Hon. Member after hon. Member has addressed appeals to the President of the Board of Trade, but he still sits silent.
We might also have heard the Treasury view. I feel that the Treasury would like to be in on the discussions.

Mr. Hale: Perhaps my hon. Friend will allow me to suggest a very important reason why the Treasury should be included. It is its knowledge of tax law and of the various methods of evading Income Tax. The Treasury might bring new and powerful light on those matters which might save the country a very considerable sum of money.

Mr. Lever: I am indebted to my hon. Friend for his intervention.
One of the problems about the Clause without the Amendment is that there will not be present at a settlement a really shrewd person to inquire what has been happening in the company in the past. If the Amendment were accepted, it would be easy to have a watchdog from the Treasury present. That would be better than having someone from the Board of Trade, for the Board of Trade is not as experienced as the Treasury in financial matters.
The Clause refers to "financial arrangements." These are essentially financial arrangements in which the Treasury is skilled. I am not suggesting that the Board of Trade is naive, and I do not altogether endorse the remarks which have been made about the incompetence of Departments. When I ask for a representative of the Treasury to be present, I want that representative to be a permanent official. The present Chancellor of the Exchequer is here today and may be gone tomorrow and then we should have another Chancellor. We

ought to have a very solid Treasury official present to watch over the use of public money.
If the Amendment is not accepted, we might find odd and unfortunate things happening. Let us examine the point about tax suggested by my hon. Friend. If the Minister continues to be obstinate and foolish enough to resist the Amendment, a company may go to the Corporation and say that it wishes to make a settlement under the terms provided in Clause 2 (1) as it now exists, and, because of the rejection of the Amendment, no Treasury official would be present.

10.30 p.m.

They are the kind of people there who know the kind of arrangements that can be made with subsidiary companies. Whereas the Board of Trade and the Corporation may have lost £100,000 in producing films someone else may have done very well indeed on distribution, on overseas sales arrangements, and so on. The Treasury could find that out. Those are matters for the Treasury to probe, and the more the President resists this proposal the more I am determined to press it upon him.

I am amazed that hon. Members opposite, who gave such an excellent demonstration of their duty to the public interest on the Friday before last, when more than two-thirds of them abstained from voting when the Government attempted to gag discussion, have not shown some of that same spirit tonight. That Friday they prevented the Government from forcing the Closure, and I am astonished that tonight they have not shown the same fervent spirit and patriotic zeal in trying to influence the Government. I appeal to them to give thought to this matter and to support this reasonable proposal.

I should feel happier about the Government's refusal to accept the Amendment if some dispassionate person on the benches opposite were to give arguments in favour of the Government's attitude, but no one has done so. Nor have the Government the vocal support of their followers in refusing to accept the Amendment. The Amendment can do no harm. It has been said it is not necessary. If it is only not necessary, let us put it in and then see what happens.

I should not want the Amendment if the Parliamentary Secretary were to give


us an assurance that a Treasury official will be present, at least, when the biggest debt of £3 million is being discussed, the debt of British Lion. I do not want the Corporation and the Board of Trade to settle the debt with British Lion alone. It is a considerable sum of money that is being bandied about. I hope the Committee will make some allowance for my provincial attitude in considering £3 million to be a lot of money. I believe that if a man chooses to do what he likes with his own money that is his affair, and I am all in favour of his being generous with it, and as generous as possible; but this is public money, and £3 million is a lot of it.

If we do not intervene by making this Amendment to the Bill, British Lion will settle this debt with the Corporation and the Board of Trade. We should feel happier if some independent party from the Treasury intervened at the settlement in connection with the country's money, which, admittedly, is going to be conceded to a private profit-making concern on terms which, presumably, will leave British Lion solvent.

The President and the Parliamentary Secretary persist in being obstinate without a single voice being raised in the Committee in their support. They persist in wasting our time and obstructing the business of the Committee by sitting mute and refusing to make concessions. I should give way to the hon. and learned Gentleman at any time he felt like indicating making one. He is obstructing the business of the Committee because he will not give a simple assurance that a Treasury official will watch over our money.

There is nothing that has happened in the past that gives us any confidence that it will be adequately safeguarded without a Treasury official being present. There is not a single person in the Committee to support the Government. Why will the hon. and learned Gentleman persist? Will he give me some assurance—I will try to meet him—that a Treasury official will be present and approve the £3 million transaction when that comes up, as it clearly will do, early in the use of this Clause? Will he give me that assurance? If he will I will give way to him.

Mr. H. Strauss: We have every intention of replying to the debate when the

hon. Gentleman sits down, but I am not going to encourage him to go on by intervening in his speech.

Mr. Lever: I do not think the hon. and learned Gentleman is at his best in Committee.
I have great respect for him. He knows I admire and respect him, but I am sorry to find that he is not at his best in Committee. He does not shine in Committee because he insists on the stilted mannerisms of the Second Reading and the Third Reading, that are appropriate then, but not in Committee. In Committee we hope for a friendly interchange of ideas and argument, freely, with the minimum of formality and maximum of lucidity and elucidation, especially in financial matters.
The Minister has an opportunity to interrupt me and bring me to a complete standstill; all he has to say is, "You are wasting your energy and your voice and the time of the Committee because there is no need to argue the matter; I will have a Treasury official present before I settle the £3 million loan with British Lion." If he gave me that assurance I would withdraw the Amendment and let him get on.

Mr. H. Strauss: That gives me a hope. The hon. Member constantly speaks as though the £3 million debt of British Lion would be decided by somebody round a table, without any documents being carefully considered or anything of the sort. I can give him an absolute assurance that before an arrangement is made between the Corporation and British Lion—which would certainly have consequences under subsection (2)—the Treasury will be consulted.

Mr. Lever: I want to know whether the Treasury will approve the settlement. If I can be sure that they will approve the settlement with British Lion—and that is what I said; it is within the recollection of the Committee—I shall be satisfied. I do not want the Board of Trade and the Corporation to settle between them the £3 million settlement with British Lion. That is what 90 per cent. of hon. Members would say if they were free to speak. We on this side of the Committee are free to speak, but I am not sure about hon. Members opposite.

Mr. Keenan: Is not the amount owed by British Lion now £2 million? Has not £1 million been written off? Had the Treasury anything to do with it when that £1 million was liquidated?

Mr. Lever: Of course, the Government should answer questions, but they are reluctant to answer any.
My right hon. Friend the Member for Huyton (Mr. H. Wilson) is the expert on this side of the Committee and is probably the only expert in the Committee at the moment on the Finance Corporation. We rely upon him. In theory, the £1 million has not yet been lost. It has merely been written off as a book-keeping item in the books of the Corporation. I will give way if my right hon. Friend wishes to correct me.

Mr. O'Brien: Here is a note about a telephone call for my hon. Friend. Perhaps that might help.

Mr. Lever: British Lion have still the original liability of £3 million. I am not trying to obstruct or take up time.

The Chairman: I am sure the hon. Member is not trying to obstruct or take up time, but he is repeating his argument and if he goes on much longer it will become tedious to me.

Mr. Lever: I was about to sit down, Sir Charles, but you kept me on my feet a little longer by rising with a menacing green book in your hand. I close by appealing to the Minister to respect the wishes of the Committee and give the kind of assurance required. We shall then get on a great deal faster with the Bill, which we are anxious to complete as soon as possible.

Mr. H. Wilson: I want to make an appeal to the Government Front Bench. We have been on this Amendment for more than an hour. It represents a very small point which any other Government, and I believe any other Minister in this Government, would have conceded. We have spent more than an hour dealing with this relatively small point about Treasury approval—but a point which is important in terms of public money. It can only be the pedantic obstinacy of the hon. and learned Gentleman in insisting in raising the very small and technical objections which prevents him from accepting the Amendment. I heard the whole of his reply and to my mind it did

not carry the argument any further forward.
The hon. and learned Member has shown that he can read with great skill the brief provided for him, and if he will turn to the bottom of it he will probably find a little note, "This is not a very important Amendment and the Minister is advised to accept it if the point is pressed." I should not be a bit surprised if he found such a note there. If he does not, I would suggest to his right hon. Friend the President of the Board of Trade that he goes into this question and gives the assurance that the hon. and learned Gentleman apparently cannot.
I do not want to get out of order on this point, but I must remind the hon. and learned Gentleman that we still have to discuss the most unusual procedure that the Government are apparently to inflict on the Committee tonight, namely of bringing a Bill, amended in Committeee, immediately to the Report stage. The hon. and learned Gentleman has wasted an hour by refusing to accept something which has often been accepted and without delay—

Mr. Strauss: Mr. Strauss indicated dissent.

Mr. Wilson: Certainly, I remember hearing this argument many times from hon. Gentlemen opposite and we never thought it worth while to waste time on it. Since more than an hour has been wasted, it provides a bad preparation for the discussion that we must have about this unprecedented proposal to bring an amended Bill immediately to the Report stage.

Mr. E. Fletcher: Are we not to have a reply?

Mr. H. Strauss: I thought I had dealt with the point in answering the hon. Gentleman, but when the right hon. Gentleman says that an hour has been spent owing to an obstinate refusal to concede this Amendment, let me give again the reason why I advised the Committee not to accept this Amendment. I explained that I had some sympathy with what I thought was the idea behind it and I explained why the Amendment was mistaken.
Of course this has been considered carefully. If the Government thought that this was a good Amendment to accept, they would say so. I have given the reasons why I think it is wrong under


this subsection, although we have provided it quite rightly under the next.
When the hon. Member for Cheetham (Mr. H. Lever) said he would withdraw the Amendment if the British Lion composition would not take place without Treasury approval, I at once gave that assurance.

Mr. Lever: Without consultation.

Mr. Strauss: If I say we will consult with the Treasury, I think that the hon. Member knows enough to know that that is normally followed by agreement.

Mr. H. Wilson: In that case will the hon. and learned Gentleman explain why he had to use three sentences for what could have been said in a few words, namely, that of course he accepted the principle of Treasury approval?

Mr. Strauss: Because I do not accept it as an addition here in every case. I said in my original speech more than an hour ago that where an arrangement under subsection (1) will clearly lead to a sequel under subsection (2), as it undoubtedly will in the case of British Lion, then of course the arrangement will not be made until the Treasury and the Board of Trade agree that it shall be made.
Of course I give that assurance. It is so obvious that I should have thought there would have been no hon. Member in this Committee who would have had any doubt about it. What I resisted, on grounds which I explained to the House, was the proposal to require Treasury approval in every case.

Mr. H. Lever: In view of that assurance, I beg to ask the leave of the Committee to withdraw the Amendment. I only say that the assurance could have been given an hour ago in unambiguous terms.

Amendment, by leave, withdrawn.

Mr. H. Strauss: I beg to move, in page 2, line 26, to leave out from "payments." to end of line 27, and to insert
by the Corporation to the Board.
I think it will be for the convenience of the Committee, Sir Charles, if this Amendment is taken with the next one, to line 29. They are little more than slight alterations in the language. The language of the Clause is not apt to achieve the object which we have been discussing all along. To make it quite

clear, I will read the Clause as it will run if both these Government Amendments are accepted. The relevant words will then be as follows:
The Board of Trade may with the approval of the Treasury postpone or remit in whole or in part any payments by the Corporation, being payments of amounts in or towards repayment of any advance made by the Board under section four of the principal Act and used for the purposes of that loan.
These words are more apt to achieve the purpose of the subsection which we have all along assumed in our discussions. Amendment agreed to.
Further Amendment made: in line 29. after "Board," insert:
under section four of the principal Act and used.

10.45 p.m.

Mr. H. Strauss: I beg to move, in page 2, line 31, at the end, to insert:
(3) The Board of Trade shall lay before each House of Parliament a statement of any payment or part of a payment in respect of any advance made to the Corporation by the Board which is postponed or remitted by the Board under the last foregoing subsection, together with particulars of any arrangements entered into by the Corporation under subsection (1) of this section with respect to the loan for the purposes of which that advance was used.
The first half of this Amendment is to provide that necessary information is given to Parliament of what is done under subsection (2). We have expanded it with the express desire to give effect to so much of the Amendment which was placed on the Order Paper by the hon. Member for Islington, East (Mr. E. Fletcher)and other right hon. and hon. Members, as we thought ought to be given. It secures that where there is what I may call a sequel under subsection (2) the House gets particulars of the arrangement made under subsection (1). I think that is a sensible proposal and meets substantially what the hon. Member had in mind.

Mr. E. Fletcher: I am obliged to the hon. and learned Member for having put down this Amendment in this enlarged form, because, as he told the Committee, it is in consequence of the Amendment which I put down. His Amendment, as far as I can see, covers the point I wished to cover in my Amendment. The object was to ensure that the fullest possible information is laid before Parliament of all the financial arrangements which the House is authorising under subsection (1).
I do not entirely follow the hon. and learned Member's observation about a sequel. He spoke as if it necessarily followed that some arrangements made under subsection (1) may have a sequel, and others not. I hope we are all agreed that whether any of the financial arrangements under subsection (1) have a sequel or not they are all to be reported to Parliament pursuant to this Amendment.

Mr. Strauss: Mr. Strauss indicated dissent.

Mr. Fletcher: The hon. and learned Gentleman shakes his head. That produces a different effect, and is not satisfactory. The object of my Amendment, which, I gather, was not called because it was considered that the Government Amendment covered it, was to ensure that all financial arrangements authorised under subsection (1) should be reported to Parliament. I fail to see why that should not be the case. If the hon. Gentleman is telling the Committee that it is only those financial arrangements that in his view will have a sequel—

Mr. Strauss: No, not in my view or in anybody's view. It is that where there is a writing off of public money under Clause 2 (2) then the particulars of the financial arrangements under Clause 2 (1) which have given rise to it will be disclosed to Parliament. Where the arrangements under Clause 2 (1) do not result in the writing off of any public money they will not be so disclosed.

Mr. Fletcher: I am not sure that the hon. and learned Gentleman has covered all possible cases. Under the financial arrangements in Clause 2 (1) the Corporation, with the approval of the Board of Trade and with a Treasury representative present, will be allowed to enter into financial arrangements with respect to loans which the Corporation may make. I fail to see why those financial arrangements should not be reported to Parliament.
The object of my Amendment is to secure precisely that. If I had thought that there was this wide divergence between the Government's Amendment and my Amendment I would have intervened at an earlier stage and pressed upon you, SirCharles, for leave to move my Amendment. But it was only because I thought, and I think you, Sir Charles

thought, that the two Amendments were substantially the same that you decided not to call mine but to call the Government's Amendment.
A disturbing situation has resulted. They do not mean the same and I must press the matter and, if necessary, ask leave to go back to my Amendment or, failing that, deal with it when we come to the Report stage. The two matters are involved together and before we can pass on I must press the Parliamentary Secretary. Why does he draw a distinction between the financial arrangements which may lead to a sequel under Clause 2 (2) and those which may not? Why did the hon. and learned Gentleman say that he can always tell in advance whether an arrangement will produce—

Mr. Strauss: Mr. Strauss indicated dissent.

Mr. Fletcher: I may have misunderstood the hon. and learned Gentleman but I do not think that I can be misunderstood when I say that I fail to see why any details of financial arrangements made under Clause 2 (2) should not be reported to Parliament. No one can tell, but any such arrangement may lead to loss of public money in one form or another, and in order to dispel the misgivings that have been expressed I should have thought that the Government would have wanted to give Parliament the fullest possible information about financial arrangements under Clause 2 (1).

Mr. H. Strauss: In courtesy to the hon. Member perhaps I should say briefly why I think that the merits are with our Amendment and why it would not be right to do more. The hon. Member and others sometimes refer to the National Film Finance Corporation as, in effect, the film bank. That sort of expression is sometimes used. It is not always right to disclose or to make public every arrangement, perhaps of a comparatively trivial character, that may be made between the banker and the customer. It might have an adverse effect upon the credit of somebody whom one did not wish to affect adversely at all.
On the other hand, where public money has eventually to be written off, I entirely agree with the hon. Member that in that case the House will certainly expect and will be entitled to have the particulars of the transaction which gave rise to that effect. Those are the reasons


why I think in every case which the hon. Member has in mind—and I think I have some idea of the sort of case he has in mind—the effect of this Amendment will give what he wants. But it does not make it obligatory to place before Parliament a number of comparatively small transactions which do not result in the writing off of any public money under subsection (2). That is why, while giving every consideration to his Amendment, we thought the right thing to do was to meet what we were certain was the legitimate reason behind it, which we have done by our Amendment.

Mr. H. Wilson: I thought that in the last few sentences the hon. and learned Gentleman was proceeding on slightly dangerous ground. I shall not pursue him very far on that ground. I thought he pursued the bank analogy a little too far. He quite rightly said that when there was a danger of a loss of public money obviously one must have the publicity which is sought. But I thought his analogy broke down from the beginning because the film bank, or Corporation, is provided by public money in all transactions and the analogy of the joint stock bank does not hold water.
Nevertheless, the Amendment moved by the hon. and learned Gentleman represents the first signs of grace we have seen from the Government throughout the Committee stage. They have taken the initiative, when they saw the Amendment we put down, to meet what we had in mind. My hon. Friend the Member for Islington, East (Mr. E. Fletcher) mentioned a number of pointson which they had not completely met what we had in mind, but we readily concede that by arranging to report to the House on each and every occasion instead of only at 12 monthly periods they have gone beyond what we proposed. To that extent we thank the hon. and learned Gentleman and support the Amendment.

Amendment agreed to.

Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."

Mr. William Shepherd: I want to say a word or two about the operation of Clause 2, because I think it gives rise to a considerable amount of concern. I share the regret of the hon. Member for Nottingham, North-West (Mr. O'Brien) at the unnecessary discus-

sion which has obscured the real objections to this Clause. We are doing something quite unprecedented in forgoing public money. I am anxious to get from the Parliamentary Secretary an assurance about the manner in which it is to be done. It is obvious that the remissions of either capital or interest which are to take place under the Clause are to affect one company, the British Lion Film Corporation. To that Corporation they are largely directed. Before we part from the Clause we are entitled to an assurance that something other than what is now happening will happen in connection with the financial arrangements of that Corporation.
Loans for the National Film Corporation are, in general, governed by each film. It is necessary for the producers to submit the script, the story and the budget before a loan is granted. In the case of the British Lion Corporation no such submission takes place and there is virtually no control of the amount to be spent on individual films. I ask my hon. and learned Friend the Parliamentary Secretary for an assurance that the conditions which then existed in relation to the British Lion Film Corporation will be altered when the new arrangements come into operation.

11.0 p.m.

I am concerned very seriously about this matter. A lot of public money is still being hazarded by the British Lion Film Corporation, and I want to cite two examples in the last 12 months. They have, I understand, spent £500,000 on a film called "Gilbert and Sullivan," and then there is a film being made at Shepperton called "Hobson's Choice" which is costing £350,000. People in the film industry are giving 20 to 1 against "Hobson's Choice" recovering any great part of this expenditure.

We are entitled to learn from the Parliamentary Secretary before we leave this Clause that he is going to insist upon the National Film Finance Corporation, under the new arrangements, having the power to veto a budget before film production is commenced. If that is done I am quite satisfied that the British Lion Film Corporation can make a very substantial contribution to the film production of this country, and they can produce films which will be economically sound.

While there is the tendency to spend large sums of money on individal films—much of it public money—there should be a check and curb put on particular companies concerned. I am not asking the Government to do this themselves. I accept that the National Film Finance Corporation is a competent medium to enforce the public interest.

Why we want this to happen is because we want to see the film industry put on a sound footing. I am quite satisfied that if we have this Bill and the Eady plan, film production can be made profitable and it is most important in those circumstances that sums of money like £500,000, which is public money, is not hazarded on individual productions. Therefore, I hope my hon. and learned Friend will be able to give us an assurance.

Mr. H. Strauss: In one point I think that my hon. Friend was not quite right. There are certain differences in procedure between loans made by the Corporation to individual firms for particular films and the use by the British Lion Film Corporation of their general loan, as I think is mentioned in some of the annual Reports. But he is wrong in thinking that there is no supervision in the matter. One of the conditions under which the loan to British Lion was originally made was approval by the National Film Finance Corporation of all budgets before shooting begins. Let me assure my hon. Friend and the Committee that before any arrangements are made between the Corporation and a debtor under this Clause, all these matters will be most carefully considered.

Mr. H. Lever: The points which I have against this Clause I dealt with on the Amendment which I proposed, and I do not want to weary the Committee by making them again. The Committee is not seen to the best advantage at a late hour, and I am not going to be repetitive with the arguments I have used.
I hope that the Parliamentary Secretary will not make it necessary for me to make appeal for the postponement of the Third Reading, because I do not think that the Report stage and the Third Reading should take place tonight. We have had a hard day discussing this and other Bills, and I sincerely hope that the Minister will find it possible to postpone the

Report stage and Third Reading so that we can consider, on the next stage, what has been said in Committee today.

Question put, and agreed to.

Clause, as amended, ordered to stand part.

Clause 3.—(SHORT TITLE, CITATION, ETC.).

Amendment made: In page 2, line 39, leave out "and 1950," and insert "to 1952."—[Mr. H. Strauss.]

Amendment made: Title: In line 3, leave out "and 1950," and insert "to 1952."—[Mr. H. Strauss].

Bill reported, with Amendments [Title amended]; as amended, to be considered upon Monday next, and to be printed. [Bill 44.]

SUPPLY [2nd December]

Resolution reported,

CIVIL ESTIMATES, SUPPLEMENTARY ESTIMATE, 1953–54

CLASS VIII

VOTE 9. MINISTRY OF FOOD
That a Supplementary sum, not exceeding £126,843,450, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March 1954, for the salaries and expenses of the Ministry of Food; the cost of trading services, including certain subsidies; a grant in aid; and sundry other services, including certain expenses in connection with civil defence.

Resolution agreed to.

Orders of the Day — WAYS AND MEANS [2nd December]

Resolution reported,
That, towards making good the Supply granted to Her Majesty for the service of the year ending on 31st day of March, 1954, the sum of £126,843,450 be granted out of the Consolidated Fund of the United Kingdom.

Resolution agreed to.

Bill ordered to be brought in upon the said Resolution by the Chairman of Ways and Means, the Chancellor of the Exchequer and Mr. John Boyd-Carpenter.

CONSOLIDATED FUND BILL

"to apply a sum out of the Consolidated Fund to the service of the year ending on the thirty-first day of March, One Thousand Nine hundred and Fifty-four," presented accordingly, and read the First time; to be read a Second time upon Monday next, and to be printed. [Bill 43.]

Orders of the Day — FUEL OFFICE, CHADDERTON (REMOVAL)

Motion made, and Question proposed, "That this House do now adjourn."—[Major Conant.]

11.8 p.m.

Mr. Leslie Hale: May I say at once in as clear and unequivocal terms as I can that I have a genuine and sincere respect for the Parliamentary Secretary to the Ministry of Fuel and Power, who has been here for some considerable time, and will be back in a moment or two. I will pay a tribute to him in his temporary absence and spare his blushes. He is a distinguished member of my profession, he is above the average as a Minister, which is not saying very much, but all I can say. He is at present my own Member of Parliament—not precisely the man I would choose—but, nevertheless, on the whole, there is reason to be thankful, and he has treated me with great generosity in this matter.
The hon. Gentleman has given me a great many figures, with varying degrees of accuracy. We met at very short notice and we had an amicable interview. The only thing we neglected was to have a photograph of us shaking hands on the doorstep at the end of the meeting. I am happy to see him here now, and it is only fair to say that our previous discussion did collapse somewhat suddenly towards the end.
I want to refer to the affairs of the urban district of Chadderton. It is a very large and substantial urban district with the Borough of Oldham on one side and the City of Manchester on the other.
It has a large and growing population. It has its own urban district council and a large and well-equipped town hall in the centre of the town. Chadderton has a large variety of industries. On the outskirts is the vast factory of A. V. Roe, Ltd., which has contributed so much to our air services. We have a tremendous variety of industries connected with the cotton spinning, weaving, dyeing, and so on. There is one great dyeing works in Chadderton itself. There is also the great Ferranti factory making radio sets, and, also, we have a jam factory, the Co-operative Jam Factory, which produces very good jam indeed.
The clerk to the urban council is a most energetic person. I will not pass any comments on the council, except to say that they have always treated me in a most friendly way and have a variety of political opinions. They have very good officers and an extremely efficient organisation which appears to work to the general satisfaction. But, suddenly, the Ministry of Fuel and Power swooped down and removed the fuel office. They have taken it to Oldham, which is at least a mile away from the site of the former fuel office and several miles from some parts of this large urban district.
The reason given is remarkable. It is said that it is hoped to save a very substantial sum of money by this transition, and I wish to deal with that at once. I am making no criticism of the administration of the fuel services in Oldham, which are in very good and efficient hands. But there are 42,000 registrations in Oldham now and 11,000 in Chadderton. It is also sought to concentrate in the one area the towns of Royton and Crompton and the township of Lees to the north of Oldham. By this means it is hoped to save £19,000.
At the conference when this matter was discussed and when we sought to find out what were the real reasons, the representative of the regional office was asked to show how that saving could be effected. He said, "Well, the way we approach these matters, and we have done it so many times, is to compare the cost per capita in the large well-administered fuel office, which is comparatively small, and the cost per capita in the small office which, on the whole, is rather large."

The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. L. W. Joynson-Hicks): The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. L. W. Joynson-Hicks) indicated dissent.

Mr. Hale: The Parliamentary Secretary shakes his head, but I have here the written notes of the meeting and that is certainly what the written notes state.
I am prepared to apply either test. A study of the actual figures shows that the present total cost of administering all four of the fuel offices which it is sought to concentrate in Oldham is £1,958. How anyone can suggest that it is possible to save £1,900 out of a total expenditure of £1,958 I do not know. There are passed to Oldham 23,000 additional registrations from the four areas and that will


not be done for an additional expenditure of £58. It will cost Oldham much more.
There are 42,000 registrations in Oldham and the cost is exactly £3,000 a year. Even for me, that is a fairly simple form of arithmetic. It means that per capita it is costing one-fourteenth of a £ per head. One-fourteenth of £1 comes to 1s. 52\per head. That is the cost in Oldham. Chadderton is a smaller area where one might expect the cost to be a great deal higher because one concedes that, unless the administration is very good, costs tend to be higher with a smaller number of registrations. In Chadderton, there are 11,000 registrations and the total cost is £780. This presents a slightly more complex computation, but it works out at 1s. 5d. and a very tiny fraction of a penny per head.
In point of fact, the figure is a remote decimal point of a penny per head less than in Oldham. Therefore, it is absurd to say that there will be any saving in the per capita cost. It is nonsense to say that there can be any considerable saving on the test of actual cost. We have the situation that if the Parliamentary Secretary had been furnished with the fullest information and adequate figures he would have seen that his claim that this will result in a substantial saving is baseless.
I refer to another matter. On 13th February, 1953, a letter was addressed from the regional coal officer to the local fuel officer at Chadderton, and, presumably, to those at Royton and Crompton. It said:
Dear Local Fuel Overseer,
We should like to get some idea of the number of requests you receive for assistance from consumers who are in difficulties about fuel supplies during the next few weeks. If you do not already have a record of such inquiries I should be grateful if from next Monday, 16th February, you could keep a simple record of the number of requests for assistance reaching your office by post, telephone and personal call. It would be helpful to have a note of the total for the week by post, at the close of business on Saturday, 21st February, and on the three following Saturdays.
There was not a word about the purpose behind it. No suggestion that "what you say may be used in evidence against you." There was nothing about this being a letter from the spider to the fly. It was an innocent rather vague request for

a bit of casual information, and on the basis of that information it is proposed to close a fuel office.
Anyone who has read that letter will not be surprised that the information appears to have been to some extent misleading because, as I understand, the figures that the Parliamentary Secretary has, the figures which have been supplied to me and the figures that he himself privately discussed with me, vary. The figures he relys on show that in the week ending 21st February there were 22 inquiries and in the week ending 28th February there were only two.
I have had an analysis made, and the real facts are that in the week ending 21st February there were 18 new registrations, each of which means a personal attendance or at least some personal dealing with a personal problem; there was one application for anthracite; 49 applications for permits for extra coal; and 56 coke registrations, a total of 124. That is six times the figure that the Minister was supplied with, and that he was relying on.
On 28th February the figure was only 78, but that is 39 times the figure that the Minister got, because he had only two. So it goes on through the whole period, with a vast number of registrations more than are given in response to this curiously vague somewhat naive inquiry. I do not think that on the whole it was the sort of letter which ought to have been addressed to a fuel overseer whose office one was thinking of closing down. Having pointed out that, so far as I can see, on the figures there is no saving of money, may I indicate the general harm to the public?
It is of course, perfectly true that it is not very far from Chadderton Town Hall to the new office, only about one mile—a 1½d. bus fare, and buses do run.

Mr. Hugh Delargy: My hon. Friend must be wrong. Twopence is the minimum fare.

Mr. Hale: I took my information from the Parliamentary Secretary. I shall leave him and my hon. Friend to work it out between them. It may be 2d., but, at any rate, bus services operate, and are operated by Oldham Corporation.
However, we are dealing with three or four important matters. The first is the


dignity and the importance of local self-government. We have had our furnished rents tribunal taken away, and the people have to travel miles away at great inconvenience about that sort of business. Now we are having our fuel office taken away, and the people of Chadderton are saying that this is most unreasonable and a censure upon an exceedingly well-conducted council with a very able staff.
What about the staff? Some are part-time. What does one do when one closes down on part-time staff? Some of the part-time staff have to be dismissed from some other part-time occupation, too. It is a matter of great difficulty which causes great hardship.
Next, there is the hardship to the people themselves. Most of the applicants are sick or aged people. After all, age or sickness are two of the reasons for applying for and obtaining special conditions. The full fuel ration has never been available in Chadderton. Now with the increasing poverty of people, and the diminishing purchasing power of the £, it would seem to be the case that less coal is being sold per head at the moment than at any time for a year or two.
Fourth, there is the habit of the people and the need of people to go to the town hall for other reasons. Indeed, the hall is also a social centre. It is exceedingly well appointed, very modern. There is dancing there at least once a week—two or three times a week sometimes. Flower shows are held there. Social events are held there. Labour Party meetings are held there. There the Member of Parliament interviews his constituents. If people have to go elsewhere, to places they may have no other reason to visit, and cannot deal with the people they trust, the people they like, it is a great inconvenience. It is a great inconvenience to go away somewhere else. For all these reasons I suggest that this is a very serious matter. It is doing harm to the district, which is a very important district.
I just want to mention one other point. Chadderton has taken, perhaps, the most progressive steps that have been taken, so far as I am aware, in the whole of the area to try to solve the problem of the location of industry. They have planned large pieces of land which they have plotted out with the Lancashire County Council for the building of new factories.
They do now intend to develop them. They do now intend to encourage new industries to come in for a wider diversity of skilled labour and can offer special facilities for the introduction of new industries second to none in the county.
I appeal to the Minister. I hope I have shown that some of the information he has got, even if accurately based on documents, is not completely revealing, and that, therefore, he has had some false impression about the facts and false impression about the figures. I ask him to look at this again and to receive a deputation, if necessary, to discuss it more fully in all its implications.

11.25 p.m.

The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. L. W. Joynson-Hicks): I am grateful to the hon. Member for Oldham, West (Mr. Hale) both for the way in which he has made his case this evening and for the opportunity he has given me of being able to reassure his constituents in this matter. We are fundamentally opposed in our approach to this problem. The hon. Member has made out a very good case for the maintenance of perpetual controls on household fuel for the sake of local pride and prestige. We on this side of the House regard ourselves as being forced by economic circumstances to continue them for the time being, but our aim and object is to get away from controls on fuel allocations altogether and we do not want to perpetuate them in any shape or form.
The general background to these proposals for the amalgamation of fuel offices is one of economy. I want, in the first place, to reassure the hon. Member that this is no reflection upon the officers in his constituency or any of the other constituencies which are concerned in this amalgamation. As the hon. Member said, five local authority areas are being amalgamated for fuel office purposes. These officers have carried out their jobs exceedingly well, exceedingly courteously, exceeding sympathetically and with great assistance not only to the Ministry but also to the people whom they have served. I want to make that perfectly clear.
The point is a financial one. The hon. Member has quoted figures to try to show that there will be no saving. I accept


the figures which he quoted; the difference in the cost of registration between Chadderton and Oldham is, as he said, a halfpenny. One is 1s. 5d. and the other is 1s. 5½d. per registration. I cannot even remember which is which for the moment. But, in any event, we do not take that into account.
When we can have these five fuel offices under one roof we shall be able to save very substantially on the number of people who are involved in the administration of the fuel requirements in the five areas. The hon. Member said that out of a total expenditure of £1,950 between the four offices which are being amalgamated with Oldham, we could not save £1,900. I did not say we could save £1,900. I said we should save a little less than £2,000, and at the time I said that, the expenditure in these four offices was about £2,250. Some of them, and Chadderton is one, have made some recent reductions in their expenditure and I think it is probably correct, that the cost of those four offices is now about £1,950.
If we save £1,750, which I think we shall, we shall be well satisfied, because on this side of the House we regard £1,750 of the taxpayers' money as being worth saving, and we have every intention of endeavouring to save it in those ways where we can do so without inflicting any hardship upon the population. Indeed, there is one case with which I am dealing in which the saving is £100. We regard these matters as being worth doing.

Mr. Harold Lever: The hon. Member should tell that to the President of the Board of Trade.

Mr. Joynson-Hicks: I spoke of hardship and said we did it where it could be done without inflicting hardship on the population. That is the criterion in these matters.
Before the hon. Members raised this case with me I had been into it, and I reviewed it again after that because of representations which I had from two of my hon. Friends who are also concerned in respect of the other amalgamations, which happen to be in their constituencies. It is a remarkably compact area. The whole centralisation of the transport and similar systems is upon Oldham and there is no difficulty of locomotion or of communication

with that centre or any part of the amalgamated area.
The second thing which I went to particular pains to verify was that the office at Oldham will be able to cope with the increased demand upon its services. Of that I am perfectly satisfied. We have been into that in great detail and the hon. Gentleman would be the last to admit that the Oldham office is inefficient.

Mr. Hale: It is very efficient.

Mr. Joynson-Hicks: I have no hesitation whatever in expressing the view that there will be no hardship imposed upon the constituents of the hon. Gentleman or the constituents in the other amalgamated authorities by reason of any failure on the part of the Oldham fuel office.
The question of hardship is the criterion, and that is the crux of the circular to which the hon. Gentleman has referred and which he read out in part that was sent out by the regional director to the local fuel overseers. If he had read on from the next sentence he would have seen that the regional director requested figures from the local fuel overseers which
should not include enquiries about change of registration or other matters unless the caller is, at the same time, seeking some immediate assistance.
The object was to ascertain the number of hardship cases.
The other cases to which the hon. Gentleman has referred are normal registration cases which always can, and should preferably, be done through the post rather than by a personal call, and they are routine matters which can be dealt with at any time. They are not hardship cases. But it was the hardship cases that we particularly wanted to verify, and the hardship cases are those which the hon. Gentleman knows about and to which reference has been made. In fact, during the six crucial weeks of last year, the most critical time when fuel was difficult, in February, there were for Chadderton 22 applications, not only in person but in writing as well, during the week of 21st February, two the next week, 20 the week after, two the week after that, six the week after that, and two the week after that.

Mr. Hale: That is the greatest tribute to the fuel overseer and to the people of Chadderton.

Mr. Joynson-Hicks: I agree, and there is no reason to suppose that there will be any less tribute deservable and payable to the Oldham office when it takes over.
There is one other thing I should like to mention, and that is that the reply which I sent to my two hon. Friends representing constituencies in the same amalgamated areas was accepted by them as being such an overwhelming case for amalgamation that they would not contest it any further. I may say that is the point of view which the majority of local authorities adopt, and that there is not as a rule any necessity for any direction to be given. It is true to say that, during the last two days only, consents have been signed for no less than 17 voluntary windings-up of local fuel offices, and in the majority of cases local authorities are glad of the opportunity of being able to do away with this line of business and to save the time of their staff, to save the accommodation, and to effect economies themselves.
As a result, in this case, the regional director had called, for this morning, a meeting of the representatives of the five local authorities being amalgamated. The invitation was accepted by four local authorities, but not by Chadderton. We are sorry that they did not come along.

Mr. Hale: May I explain that? They knew about this debate and I think it was out of courtesy to me.

Mr. Joynson-Hicks: That may be so, but I am sorry that they did not come. The discussion was to settle the mechanics for implementing the order, and they were settled in a most amicable and friendly atmosphere.
As the hon. Gentleman has said, the two fuel offices are under a mile apart—in fact, they are nine-tenths of a mile apart. There is a regular bus service every quarter of an hour during the morning and every 7½ minutes during the afternoon. It is a 1½d. bus fare. The house coal stocks throughout the area are greater than they were at this time last year, and, therefore, there is no conceivable reason to suppose that the constituents of the hon. Gentleman will suffer any hardship at all.
The only doubt they may have had would have been due to the fact that they might have been in ignorance of the change of the local fuel overseer's office from Chadderton to Oldham. The hon. Gentleman has served his constituents well by raising the matter tonight. He has introduced publicity into the matter, which, I am sure, will be reported in his local Press, so that all his constituents will know of the change which is being carried out. Thus they will not be caused to suffer, or be put to inconvenience, on that score.
We are convinced that this is a necessary amalgamation in the public interest, and that the hon. Member's constituents will not suffer hardship. If they do, they have only to go to the local fuel overseer, or through him to me, and we will do what may be necessary to help. We hope that this new system will work well, and I am convinced that it will result in a substantial saving of the taxpayers' money.

Question put, and agreed to.

Adjourned accordingly at Twenty-four Minutes to Twelve o'Clock.